Donor Managed Investment Account: A Guide to Giving and Saving

A donor managed investment account is a powerful way to give back to your favorite charities while also growing your wealth over time. This type of account allows you to invest your donations in a diversified portfolio, earning interest and potentially increasing your impact.

You can choose from a variety of investment options, including stocks, bonds, and mutual funds, to create a portfolio that aligns with your values and goals. For example, you might choose to invest in socially responsible companies or focus on long-term growth.

By investing your donations, you can make a bigger impact on the causes you care about. According to research, donors who invest their donations can see their impact grow by up to 20% over time.

As you explore the benefits of a donor managed investment account, keep in mind that you have complete control over the investment decisions. This means you can adjust your portfolio as needed to stay aligned with your values and goals.

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An IMA allows you to empower giving your way, furthering your charitable goals while your investments are expertly managed through a Community Foundation Donor-Advised Fund.

The Community Foundation's individually managed account (IMA) program is a smart investment for philanthropists and their professional advisors.

You can establish a Donor-Advised Fund (DAF) to support the causes you care most about, while your advisor continues to manage your charitable assets donated to the fund.

An IMA empowers you to make a lasting impact on the causes you care about, with expert investment management and philanthropic support.

You can name your advisors or successor advisors to your account, and they can assume these roles as soon as they turn 18. This allows you to involve your loved ones in the grantmaking process.

If you name multiple successor advisors, your account assets will be split into separate new accounts for each of them, giving each one advisory responsibilities on one of these new accounts.

You can also choose to create a customized investment plan with your advisor(s) if you contribute $500,000 or more, subject to approval from the organization managing your account. This allows you to tailor your investment strategy to your specific goals and risk tolerance.

NPT charges charitable administration fees, which cover expenses such as grantmaking, recordkeeping, and tax filing. These fees are determined by applying a blended schedule to your account's average daily balance each month.

Consider reading: Investment Manager Fees

You'll want to keep your tax documents organized, especially when it comes to charitable donations.

To claim your charitable tax deduction, you'll need a copy of the contribution receipt at the time you file your taxes.

Consult your tax advisor to determine the best way to claim your deduction, as the rules can be complex.

You won't pay capital gains tax on securities you contribute to your donor-advised fund account because NPT, the charity, doesn't pay capital gains tax when selling gifted securities.

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You can name advisors or successor advisors to your account, and they can assume these roles as soon as they are 18 years old.

If you name more than one successor advisor, your account assets will be split into separate new accounts for each successor advisor.

Your named successor advisors will have advisory privileges on accounts created from your account assets, and they can even name their own successor advisors.

At NPT, you can choose an investment strategy from a variety of best-in-class options, and if you contribute $500,000 or more, you and your advisor(s) can create a customized investment plan.

NPT charges charitable administration fees, which cover grantmaking, recordkeeping, and other operating expenses.

You can designate one or more charitable organizations as account beneficiaries, and if you don't specify any, NPT can annually distribute 5% of your account's balance to previously granted charities.

There is no limit to the number of grants you can recommend in a year, and you can always consult with your tax advisor or attorney before making a charitable contribution.

The impact portfolios include a mix of actively and passively managed mutual funds, ETFs, fixed income funds, and cash holdings, and they address specific themes such as Environmental Stewardship and Equity and Inclusion.

The value of the units in the impact portfolios will fluctuate based on changes in the values of the underlying portfolio holdings.

There are always risks associated with investing in securities, and investment in NPT's impact portfolios involves risk of loss of principal and risk of decline in market value.

The Broad Social Impact portfolio, which includes private investments, is targeted for donors with an aggressive risk tolerance and a longer investment horizon.

You can recommend an allocation of your donor-advised fund assets into multiple portfolios, including both impact and traditional model portfolios.

For another approach, see: Managing Investment Portfolios

You can make contributions to your donor-advised fund account at any time, with a minimum of $5,000. This allows you to replenish your available grantmaking funds as you recommend grants.

A written confirmation of your contribution(s) is provided, serving as a receipt for tax purposes. You can claim a charitable contribution deduction for your contribution, but grants recommended from your DAF account cannot be used to take a tax deduction.

You can contribute a wide range of assets, including cash, publicly traded securities, restricted and controlled stock, and even cryptocurrency. The most common and cost-effective contributions are appreciated securities you've owned for more than one year.

You can also contribute IRA, 401(k), or other retirement account assets, as well as proceeds from life insurance or a full-paid policy. Bequests and testamentary gifts, and remainder interest from a charitable remainder trust, are also accepted.

A contribution becomes a donation when the asset is out of your control, determined by the type of asset and when/ how it's transferred to your NPT donor-advised fund account.

Here's a breakdown of the types of contributions you can make:

Grants you recommend from your DAF account are not eligible for tax deduction, but you can deduct the total fair market value of the contribution from your federal income taxes.