Jeff Ritchie

Jul 28 2014

How a Donor Advised Gift Fund Works


Donor Advised Gift Fund

A Convenient Approach to Non-Endowed Gifting

Hills Bank Trust and Wealth Management offers a solution that can simplify your charitable giving process. The Hills Bank Donor Advised Gift Fund was established in 1997 for donors who desire to make important gifts to 501 (c)(3) charitable organizations that are public charities under Section 509 (a). Since its inception, the Fund has distributed over $30 million to donor-selected charities.

Individuals and businesses who use the Fund appreciate our streamlined process that makes donations to charities convenient, cost effective, and tax efficient and also simplifies their record keeping. Since this is a non-endowed fund, there is an added benefit—you control the distribution rate. Contributions can be distributed immediately or you can give for years to come through the carryover balance in your account.

Deduct Your Contributions Today, Choose Your Charities Later
Contributions of cash or marketable securities to the Hills Bank Donor Advised Gift Fund are recognized for IRS purposes in the year of donation. This feature provides you an opportunity to give more thought to choosing which organization(s) you wish to support—without being pressured by arbitrary
year-end tax planning considerations. Appreciated securities can be contributed so that capital gains taxes may be avoided. If desired, you can gift anonymously.

Your Investments Are Selected Locally
You can choose an appropriate investment objective for your account using investments selected and monitored by Hills Bank Trust and Wealth Management. Investment choices range from a money market fund to balanced and growth-oriented portfolios.

Let Us Take Care of the Details
The Fund provides a broad range of administrative services for you. We will take care of charitable gift record keeping details such as documenting and issuing gifts, as well as verifying that gifts are being received by eligible charities.

You will receive confirmation of each gift made. A quarterly statement provides your balance, lists gifts made from your account, and shows investment income received.

Establish a Donor Advised Account
An initial donation of $10,000 in cash or marketable securities will open your account within the Hills Bank Donor Advised Gift Fund. Additional contributions having a value of $2,500 or more may be made at any time. Investment income attributable to your gift is not taxable and is added to your account, increasing the amount available for giving. You do not need to be an Iowa resident to participate in the Hills Bank Donor Advised Gift Fund.

For more information, please visit HillsBankWealthManagement.com or contact one of our Trust and Wealth Management Officers.

All gifts to the Fund are irrevocable, non-refundable, and given without restriction or conditions. Therefore, it is important that you consider your long-term charitable plans and income needs before establishing an account. Please discuss your gifting and estate plan with your legal and accounting advisors.
 
Donors should note that IRS regulations require the Fund to certify that 100% of the distributions directly benefit charitable organizations. Therefore, the Fund may not be used for private or personal benefit such as tuition obligations or securing tickets, nor may the Fund be used for political contributions or activities. The fulfillment of a pledge is considered to be a discharge of a personal obligation, and is not allowed by the Fund.
 
Investment products are not a deposit, not FDIC insured, not insured by any federal government agency, carry no bank guarantee, and may go down in value.
Jeff Ritchie

About Jeff Ritchie

Jeffrey Ritchie, JD is Vice President, Trust Officer at Hills Bank’s North Liberty location on Forevergreen Road. He has been at Hills Bank since 2005 specializing in personal trusts and estate administration. Jeffrey’s professional expertise includes estate planning and probate, real estate, and income tax preparation. Jeffrey earned his undergraduate degree at the University of Northern Iowa and continued his education at the University of Iowa College of Law. Prior to joining the bank, he practiced law in the Amana and Marengo communities. Jeff can be reached at 1-800-899-8858.


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