Harris has launched the Harris Charitable Fund Program under the sponsorship and management of National Philanthropic Trust (NPT), a national public charity and major donor-advised fund (DAF) provider, the two organizations announced Tuesday, August 24. In addition, Harris myCFO Foundation, a public charity, has granted its assets to NPT, which will administer the granted assets under the Harris Charitable Fund Program.
The new Harris program is a private-label relationship that NPT offers to financial service firms, Andrew Hastings, NPT’s vice president for external affairs, said in a joint telephone interview with Claudia Sangster, Harris Bank’s director of philanthropy, estate and trust services. “We’re providing the back office, the day-to-day operations, the charitable administration of the program so that Harris can focus on their core competency, which is investment management and providing their clients sound financial advice and services, of which charitable giving and DAFs are a part.”
The Harris DAF can accept a wide variety of assets from donors, including cash, appreciated stock, bonds, mutual funds, restricted and closely held or non-publicly traded securities, real estate, limited partnerships, deferred gifts and other illiquid assets, Sangster said. But like any charity, it has the right to refuse a gift. According to Hastings, NPT evaluates each one on a case-by-case basis. “Often, the issue isn’t so much our willingness to accept a gift,” he said. “It may be the tax consequences to the donor that may stop them from making the gift because they may be exposed to capital gains tax or unrelated business income tax that may reduce the overall deductibility of the gift.”
Sangster said the DAF offers donors four investment pools designed to reflect their philosophy on investment risk, reward and time horizon for grant recommendations: highly conservative, income, moderate and growth. Each account has one or more advisors who make grant recommendations. Because of the way a DAF works, donors themselves can express their grant preferences, but cannot require that donations go the charities they designate. [A donor to a DAF takes a tax write-off on the contributed assets, thereby ceding "ownership" of the assets to the DAF.]
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Sangster said donors in the Harris DAF range across a wide spectrum of wealth, from those with quite modest means to ultra wealthy families. The minimum first grant recommendation is $250. She said donors set up a DAF account because the structure is straightforward and flexible, and it allows them time for thoughtful giving as opposed to rushing to write checks on the last calendar day of the year. “Our clients are looking for a simple solution or because they’re too busy to operate another business-a foundation,” she said.
Hastings noted that donors have 1.4 million U.S.-based charities from which to choose. “We can support any qualified charity for any qualified charitable purpose,” he said.
NPT can also facilitate grants to foreign charities. Sangster said this rare capability among charitable organizations was one of NPT’s chief attractions as a collaborator for Harris. She said Harris myCFO Foundation was originally set up in part to address
donors’ desire to recommend direct foreign grants and require accountability from recipients regarding their use of restricted grant funds. In NPT it has found an organization fully capable of helping them do that, she said.