NPT-UK Donor-Advised Funds: FAQ
Click on the questions below for answers to the most frequently asked questions about our donor-advised funds. If you have a question that isn't covered in this section, please call NPT-UK at +44 (0)800 133 7540.
GeneralWho is NPT-UK?
NPT-UK is an independent UK registered charity providing uniquely flexible donor-advised funds.
We are dedicated to providing philanthropic expertise to donors, foundations and financial institutions, enabling them to realise their philanthropic aspirations.
NPT-UK was founded in 2013 in response to growing demand for donor-advised fund giving vehicles. As a UK/US dual qualified charitable structure, NPT-UK offers donors paying tax in the US and the UK the ability to claim Gift Aid in the UK, claim UK tax relief and receive a US tax deduction.
NPT-UK is associated with National Philanthropic Trust (NPT) in the United States. NPT was founded in 1996. Since that time, NPT has raised $10 billion in charitable contributions and currently manages over $6.2 billion in charitable assets. It has made more than 200,000 grants totalling $5 billion to charities all over the world. NPT ranks among the 25 largest grantmaking institutions in the United States.
Donor-advised funds offer administrative convenience, cost savings, and tax advantages versus other types of giving vehicles. If you give to a UK charity directly and you are also an American tax payer, your gift does not qualify for a US tax deduction. If you give to a US charity directly and you are a UK tax payer, your gift does not qualify for Gift Aid and you cannot claim tax relief on your tax return. NPT-UK offers a tax effective giving vehicle for US/UK dual taxpayers.
Because NPT-UK is recognised as a charity in the UK and regarded as a US tax-exempt organisation for US tax purposes, donations qualify for Gift Aid and donors are able to claim UK tax relief and receive a US tax deduction.
Donations to NPT-UK are treated as donations to a U.S. charity by the Internal Revenue Service.
NPT-UK is an English charity (Charity Number 1153376) and an English charitable company (Company Number 08612103). HMRC recognises NPT-UK as an independent English charity.
National Philanthropic Trust (EIN 23-7825575) is the sole shareholder of NPT-UK. National Philanthropic Trust is recognized by the United States Internal Revenue Service (the “IRS”) as an organisation that is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”) and classified as a public charity under Sections 509(a)(1) and 170(b)(1)(A)(vi) of the Code.
The IRS recognises NPT-UK as a disregarded entity of National Philanthropic Trust (IRS Form 8832). As a result, NPT-UK is considered a public charity described in Sections 509(a)(1) and 170(b)(1)(A)(vi) of the Code for US tax purposes.
NPT-UK is not listed separately on GuideStar or the IRS website. As a disregarded entity, NPT-UK is considered part of the National Philanthropic Trust for US tax purposes. NPT (UK) Limited is disclosed as a disregarded entity of National Philanthropic Trust in Form 990, Schedule R, Part I.
Opening a Donor-Advised Fund AccountWho can open a donor-advised fund account?
Individuals, families, companies, foundations, and other entities can start a donor-advised fund account by contributing assets.
You may open a NPT-UK donor-advised fund account in GBP or USD.
The minimum required to open a donor-advised fund account with NPT-UK is £20,000/$32,000 or more. Once your account is established, you can make subsequent contributions of £2,000 or $3,200 or more.
Yes. You can choose any name for your donor-advised fund account. You can even call it a Foundation. Most donors choose a name that reflects the main purpose of the account such as “The Smith Educational Fund.” Some donors select a name that helps them remain anonymous.
At NPT-UK, it takes less than a day. Once you submit a completed donor application, your account is established and ready to receive contributions.
Individuals with non-domiciled (‘non-dom’) tax status in the UK can start a donor-advised fund by contributing assets.
If you have this tax status and make a donation directly to a UK charity using offshore funds, the donation may be considered ‘remitted income’ by UK tax authorities.
NPT-UK can accept your contribution offshore and it will not be considered ‘remitted income’ by UK tax authorities.
NPT-UK provides you with a confirmation of your contribution(s) that serves as a receipt for UK taxes purposes and another confirmation that serves as a receipt for US tax purposes (if applicable).
Your gift may benefit from Gift Aid. To qualify for Gift Aid, donors must make cash contributions. Under the Gift Aid scheme, donors must pay enough UK income and/or capital gains tax in each tax year to cover the amount of tax that charities claim on your behalf for that tax year. The Remittance Basis Charge paid by non-domiciled taxpayers qualifies as UK income tax for Gift Aid purposes.
Managing a Donor-Advised Fund AccountCan my children be involved with my donor-advised fund account?
Yes. You can name them as an advisor or successor advisor to your account. They can legally assume these roles as soon as they are 18 years old. If the Successor Advisor is a minor, NPT-UK may require that a legal guardian make grant and investment recommendations.
Yes. Your account assets can be split between multiple successors. Or, you can have your successors share in the advising responsibilities. Also, your successor advisors can name their own successor advisors. At NPT-UK, there are several ways that your donor-advised fund account can exist in perpetuity.
At NPT-UK, you can recommend an investment strategy from a variety of options. Also, if your DAF has a balance greater than £500,000/$800,000, you and your advisor(s) can create a bespoke investment account with NPT-UK-approval.
Each DAF is subject to an annual charitable administration fee, which is deducted by NPT-UK to cover DAF operating expenses such as grantmaking, recordkeeping, annual audits, tax filing, quarterly statements and other legal and fiscal responsibilities. NPT-UK determines the amount of these fees by applying a blended fee schedule against the average daily balance of your DAF account at the end of each month.
Investment management fees vary by third party investment manager and are deducted for each DAF.
If no Successor or Charitable Beneficiary is named in the Succession Plan, the balance of the donor-advised fund account remaining at the death, resignation or other removal of the last Advisor will be transferred to the NPT-UK Giving Fund.
Your contribution to your NPT-UK donor-advised fund account is an irrevocable contribution and becomes a charitable asset. Therefore, all NPT-UK donor-advised fund account balances must be granted to charitable organisations.
Assets You Can Contribute and DefinitionsWhat types of assets can I contribute to my donor-advised fund account?
NPT-UK accepts a wide range of assets, including:
- Shares or securities which are listed on any recognised stock exchange. These include London Stock Exchange (LSE), Alternative Investment Market (AIM), NYSE, NASDAQ, and any other recognized overseas stock exchange.
- Some other financial assets. Please contact us to discuss any proposed gift.
- Transfers and grants from other donor-advised fund programmes.
- Transfers and grants from charitable trusts and foundations.
- Bequests from wills
NPT-UK strongly encourages you to consult with your tax advisor or legal advisor before making a charitable contribution.
All gifts to NPT-UK are irrevocable and must be completely given, without reservation of benefit, in order to qualify for charitable tax reliefs. A contribution becomes a donation when the asset is “out of the donor’s control.” This is determined by the type of asset you contribute, when and how it is transferred to your NPT-UK donor-advised fund account.
Cash and gifts of shares are the most common contributions.
Cash contributions are eligible to benefit from Gift Aid in the UK. NPT-UK will claim Gift Aid on your contribution and apply the additional amount (25% of your net contribution) to your donor-advised fund account.
If you pay over the basic rate of tax in the UK, then you are eligible to claim the difference between your tax rate and the basic rate of tax on the gross donation.
A gift of shares has a double tax benefit. If gifted to your donor-advised fund account, you do not pay any capital gains tax on shares that have increased in value and you can claim income tax relief on the total fair market value of the contribution on your self-assessment tax return.
Payroll Giving is a UK scheme which allows you to donate to charity from your pre-tax salary. Payroll Giving donations are deducted before tax so each £1,000 you give will only cost you £600 if you're a higher rate (40%) tax payer or £550 if you’re an additional rate (45%) tax payer. If you would like to support your donor-advised fund by giving in this way, please check with your payroll or HR department to learn if your company already operates a payroll giving scheme. If it does, simply ask them for a form and complete it with your chosen amount and name NPT-UK, charity number 1153376, as your charity.
Contribution Amounts and FrequencyHow much do I need to open a donor-advised fund account?
The minimum required to open a donor-advised fund account with NPT-UK is £20,000/$32,000 or more. Once your account is established, you can make subsequent contributions of £2,000/$3,200 or more.
To benefit from Gift Aid and higher rate tax relief on your UK tax return, your UK income and/or capital gains tax liability for each tax year must be equal to or greater than the amount of Gift Aid claimed on your behalf by charities for that tax year.
You may contribute £2,000/$3,200 or more at any time. Many donors like to add to their donor-advised fund accounts immediately after they recommend a grant. Others prefer to make regular contributions and build up the account for future grantmaking.
It is important to consult your tax advisor since there may scope for planning your giving to maximise tax reliefs. This is of particular importance for UK-US taxpayer donors.
The UK tax year runs from 6 April in one year to 5 April in the next. In the UK, to qualify for tax relief, an eligible gift may be received by NPT-UK by 31 January after the end of a tax year and still be counted towards that tax year as long as you have not yet submitted your self-assessment tax return.
The US tax year runs from 1 January to 31 December in each year. In the US, to qualify for a US deduction up to applicable limits, the gift must be received by NPT-UK by December 31st of the year for which the deduction will be taken.
Contribution Management and ReportingWill I get a receipt for my contributions?
Yes. NPT-UK provides you with a confirmation of your contribution(s) that will be a suitable record for your UK taxes and a receipt that is suitable for US tax purposes.
With a donor-advised fund account, you can immediately claim tax relief on your contribution. If your cash gift benefits from Gift Aid, you will receive a second confirmation once Gift Aid is received.
Because tax relief is available immediately for eligible contributions, grants made from your donor-advised fund account are not subject to additional tax advantages.
You may recommend an investment approach for your DAF assets.
If your contribution is liquid, we invest it within several business days of receiving it. If your contribution is illiquid, we invest it within several business days of receiving proceeds from its sale.
Note: This section is limited to general information about UK taxes and US taxes. Each donor’s circumstances are different. NPT-UK strongly encourages you to consult with your tax and legal advisors before making a charitable contribution.
Tax AdvantagesWhat type of tax advantages might be associated with my contribution?
For detailed information, please visit The Tax Advantages of Donor-Advised Funds page.
For more information about Gift Aid, see How Gift Aid Works: A Case Study.
Yes. Here are some general guidelines:
For US Tax Purposes
Cheque/bank transfer: Your charitable deduction is the amount of your cash contribution, plus the value of Gift Aid reclaimed by NPT-UK.
Publicly-traded shares: If you have owned your donated shares for more than one year your charitable deduction is the fair market value of those securities, determined by an average of high and low on the date you contribute them.
For UK Tax Purposes
Cheque/bank transfer: You may claim the difference between your tax rate and the basic tax rate on the gross value of the contributions to NPT-UK if you are a higher or additional rate tax payer in the UK.
Publicly-traded shares: You may claim income tax relief on the total fair market value of the contribution on your self-assessment tax return (and the transfer will be free from capital gains tax).
NPT-UK is a UK charity for tax purposes. Your gift of appreciated shares does not create a capital gains tax liability for either NPT-UK or the donor.
For more information, see Donating Appreciated Shares: A Case Study.
No. Only contributions to NPT-UK are tax deductible. Growth within your donor-advised fund account is not eligible for an additional deduction.
There are no limits on the amount of tax relief that can be claimed on your tax return for your charitable contributions.
However, please note that your UK income and/or capital gains tax liability for each tax year must be equal to or greater than the amount of Gift Aid claimed for that tax year.
Please contact your tax advisor to evaluate your tax relief limits.
Under the Internal Revenue Code, deductions for charitable contributions are subject to certain "percentage limitations." That means you can deduct a stated percentage of your adjusted gross income ("AGI") in the year you take the deduction. Contributions in excess of these percentage limitations may be carried forward for additional years.
Because National Philanthropic Trust is a public charity in the United States, percentage limitations that apply are the most favourable charitable deductions available. Deductions for contributions of long-term capital gain property—such as appreciated securities held for more than one year—are limited to 30% of AGI. Deductions for cash contributions may be taken up to 60% of AGI. Your ability to take itemized deductions may be subject to certain other limitations.
Please contact your tax advisor to evaluate your tax deductibility limits.
Tax Liability and FilingWhy is the net amount in my DAF account different from the amount of my tax relief and deduction?
This difference is due to market fluctuations and liquidation costs.
NPT-UK asks that you consult your tax advisor to determine your charitable tax deduction.
If you are a US taxpayer, you will receive a gift receipt and an IRS Form 8283 for eligible contribution(s) from NPT in the United States to file with your US tax return.
It is extremely important to review the information on this form since it is your responsibility to submit correct information to tax authorities.
NPT-UK provides you with a confirmation of your contribution(s). This confirmation serves as a receipt for your UK taxes.
It is extremely important to review the information on this form since it is your responsibility to submit correct information to tax authorities.
Grantmaking Guidelines and DefinitionsCan I recommend a grant from my donor-advised fund account to attend a charity event?
No. When you make your initial contribution to a donor-advised fund, your contribution is eligible for Gift Aid and tax relief. That is because you do not receive any goods or services in exchange for that contribution. Charitable events and galas provide their attendees with benefits that aren't tax deductible -- such as food, drinks and/or door prizes. Therefore, grants recommended for these purposes cannot be approved.
You may support any charity that is registered with the Charity Commission for England and Wales, Office of the Scottish Charity Regulator and Charity Commission of Northern Ireland, exempt UK charities (such as UK universities) or any charitable organisation that is tax-exempt under Internal Revenue Code (IRC) Section 501(c)(3) and public charities under IRS Section 509(a) in the United States.
You may also support other charities worldwide. These may require additional due diligence.
If you wish to plan for more strategic philanthropy, NPT-UK can recommend professional consultants. You can contact our philanthropic team on 0800 133 7540.
Grants to organisations outside of the UK or US require additional due diligence to determine if the charity is eligible. International grants also require additional monitoring. As a result, NPT-UK charges additional fees for these types of grants. These additional fees are charged to your donor-advised fund account when you recommend the grant.
You may recommend grants to qualified charitable organisations around the world at any time, provided your DAF has available funds and liquidity.
In the UK, organisations must be registered with the Charity Commission for England and Wales, Office of the Scottish Charity Regulator and Charity Commission of Northern Ireland or otherwise recognised as charities under the laws of those jurisdictions, including, for example, ‘exempt’ or ‘excepted’ charities.
In the US, organisations must be tax-exempt under US IRS Code Section 501(c)(3) and public charities under Code Section 509(a)(1), (2) or (3); and/or private operating foundations described in Section 4942(j)(3) of the US IRS Code. Grants may not be used to fulfil an existing pledge or support political campaigns or lobbies.
If you have a special grant request, please contact a member of NPT-UK's staff.
No. When you make a contribution to a DAF, you are entitled to take the full tax benefit of the contribution. This is because you have received nothing (in excess of purely incidental benefits) in return for your contribution. If your donor-advised fund satisfies a pledge, you will be receiving something in return for your contribution – release of an obligation.
NPT-UK cannot make grants to private non-operating foundations. Also, NPT-UK cannot make grants to individuals or to satisfy a pre-existing pledge. Grants cannot be made to political candidates or parties. Grants cannot be used for any personal benefit, such as tuition, dues, membership fees or any goods purchased at a charitable auction.
Yes. You may also recommend a grant in someone's honour or memory.
Yes. Please check the policies of your company.
Grant Amounts and FrequencyWhat is the minimum amount for an NPT-UK grant?
NPT-UK’s minimum grant is £200 or $320.
There is no limit to the number of grants you can recommend in a year.
Grant Fees and ProcessingIs a fee charged for each grant I recommend?
NPT-UK does not charge a per-grant fee. NPT-UK does charge additional fees for grants outside of the UK and US and under special circumstances, like a specialised grant agreement. All fees are exclusive of VAT, when applicable.
Grants will be processed once the recipient organisation has been approved to receive grants.