Donor Advised Funds by Schwab Charitable
A Better Way to Give
A Schwab Charitable donor-advised fund account is a simple, tax-smart investment solution for charitable giving.
You can open a Schwab Charitable account with a minimum irrevocable contribution of $5,000. You will be eligible for
an immediate tax benefit, if you itemize, when you contribute to your account, and you will enjoy the convenience of
giving to your charities of choice over time. You will have flexibility in your contributions and your investment choices,
the level of customization you want for your giving, and more. You can recommend grants to any IRS-qualified charity
of your choice. Grants can be made online, through a mobile device, or by calling Schwab Charitable. With Schwab
Charitable’s support, you can fulfill your philanthropic goals and potentially have a greater impact on causes that
matter to you—when it’s needed most.
How it works
1. Open
a Schwab Charitable™ account by visiting us online at schwabcharitable.org to complete an application.
2. Contribute
to your account with an irrevocable,
tax-deductible donation, for those
who itemize, of $5,000 or more in
cash, publicly traded securities, or
non-cash assets such as real estate
and private equity.
3. Invest
your contributions for potential
growth—choose from a wide
range of investment pools on your
own or recommend an investment
advisor to professionally manage
a larger account. Make additional
contributions at any time.
4. Grant
recommendations of $50 or
more can be made at any time
to any IRS-qualified 501(c)(3)
organization.
5. Extend
your account, assigning successors,
or setting up recurring gifts—so
your charitable legacy can live on
for generations.
A donor’s ability to claim itemized deductions is subject to a variety of limitations depending on the donor’s specific tax situation.
Schwab Charitable accepts illiquid assets for contribution on a case by case basis Call Schwab Charitable for more information at
1-800-746-6216.
Understanding your Options
A Schwab Charitable™ donor-advised fund account is a flexible and tax-efficient way to give, whether it is used as your primary charitable vehicle or a complement to a private foundation.
| Private Foundation | Donor-Advised Fund | |
| Asset Minimums | Generally recommended only for those with millions of dollars in charitable assets | $5,000 |
| Startup Costs | May be substantial—legal documentation, tax filings, other | None |
| Ongoing Annual Expenses | Administrative fees apply, and staffing and attorney or CPA fees may apply | Administrative fees apply* |
| Privacy | Public disclosure of contributions and grants in annual tax filings | Individual account activity can be private |
| Tax deduction limits for cash contributions for those who itemize | 30% of adjusted gross income (AGI) | 60% of AGI |
| Tax deduction limits for securities contributions | 20% of AGI | 30% of AGI |
| Tax deduction limits for real estate and other assets | 20% of AGI, deductible at cost basis | 30% of AGI, deductible at fair market value |
| Administration | Required recordkeeping, asset management, review of grant solicitations, tax filings | Managed by Schwab Charitable™ |
| Reporting | Required annual state and federal tax returns | None at the account level |
| Taxes | Excise taxes, up to 2% of annual investment income | None |
| Annual distribution requirements | 5% distribution required annually | At donor’s discretion |
| Professional asset management options | No | Yes |
provided here may differ from the legacy donor-advised program. See “Creating a legacy” in this article.
Investment Options
We offer a comprehensive range of investment options to meet a wide variety of goals. You can choose from either a
core or a professionally managed account.
Core account
With a core donor-advised fund account, choose among op-performing investment pools from a variety of leading investment providers.
| Pre-Allocated Investment Pools | Single Asset Class Investment Pools | Single Asset Class Investment Pools | Single Asset Class Investment Pools |
|---|---|---|---|
| – Conservative = Balanced – Socially Responsible Balanced – Growth | Index Pools Income Index Total Market Equity Index International Equity Index Small-Cap Equity Inflation Protected Bond | Actively Managed Pools – Short-Term Income – Income – Large-Cap Equity – International Equity | Money Market – Money Market |
Core donor-advised fund account holders may choose from a wide variety of investment pools that feature prescreened, competitive mutual funds, including:
- Pre-Allocated Investment Pools for donors who want to recommend a diversified investment strategy with one investment choice
- Single Asset Class Investment Pools that can be combined by donors who want to recommend a more customized investment strategy
Market fluctuations may cause the value of investments held in a donor-advised account to be worth more or less than the value of
the original contribution to the funds.
Account holders should carefully consider information contained in the prospectus for the registered underlying mutual funds,
including investment objectives, risks, charges, and expenses. You can request a prospectus by calling Schwab Charitable™ at
1-800-746-6216. Please read the prospectus carefully before making contributions or recommending investment of funds. Money
market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the
fund.
Professionally managed account
With a professionally managed account, you can recommend an investment advisor to create an investment strategy to help support your philanthropic goals.
| Publicly Traded Securities | Alternative Investments |
| – Stocks – Bonds – Mutual Funds – Exchange-Traded Funds (ETFs) – Exchange-Traded Notes (ETNs) – CDs | – Hedge Funds – Private Equity/Venture Funds – Real Estate Funds – Real Asset Funds |
Publicly Traded Securities
For accounts of more than $250,000, you may recommend an independent investment advisor to actively manage a customized investment portfolio for your account (subject to Schwab Charitable™ investment policies and oversight). The advisor has the option to
invest in a broad range of investments.
Alternative Investments
For our largest accounts, an independent investment advisor or wealth manager may also recommend alternative
investments (including hedge funds, private equity/venture funds, and private debt) for your portfolio. All privately
offered alternative investments must be reviewed and approved in advance by Schwab Charitable.
Professionally managed accounts are available only through independent investment advisors working with Schwab Advisor
Services™, a business segment of The Charles Schwab Corporation serving independent investment advisors and including the
custody, trading, and support services of Charles Schwab & Co., Inc. Although donors may recommend an advisor, Schwab
Charitable Fund must approve the recommendation. Advisors must meet certain eligibility requirements and adhere to Fund
fee and investment guidelines. You may request a copy of the investment guidelines by calling 1-800-746-6216.
Granting Made Easy
- Quick and simple grants made to any IRS-qualified 501©(3) organization through Schwab Charitable’s online client center.
- Access to GuideStar®, a national database of almost 2 million charitable organizations, to help you research and verify charitable organizations.
- Personalized letters featuring your own custom letterhead generated for you.
- Schwab Charitable mails the checks, keeps track of your contributions and grants, and compiles a simple annual report for you at tax time.
- Ensure your philanthropy extends beyond your lifetime, continuing to support the causes you care about most.
Creating a Legacy
With a Schwab Charitable™ account, you can make sure your philanthropy extends beyond your lifetime, continuing to
support the causes you care about most for years to come.
| Account Minimum at Activation: | – $100,000 for core donoradvised fund account – $250,000 for professionally managed account |
| Minimum Annual Distribution: | – 5% of account balance |
| Minimum Term: | – Five years – Will terminate with lumpsum grants if balance falls below $5,000 |
Involving your Family:
- Create a special name for the account (e.g., “The XYZ Family Fund”).
- Involve your family in recommending grants to engage them in family philanthropy and encourage a tradition of giving.
- Name successors and beneficiaries to the account in order to ensure a legacy of charitable giving for future generations.
Charitable Legacy Program:
- Set up future recurring gifts to your favorite charities to ensure that your philanthropic wishes are followed
for years to come. - Recommend charitable organizations as grant recipients,each to receive a percentage of the
remaining donor advised fund account balance over time.
We encourage you to reach out to our team to help you plan and protect your legacy.
Updated April 21, 2020