Donor Advised Funds
While it is generally permissible for donors to direct gifts to The University of Iowa Foundation through donor advised funds (DAFs), there are restrictions imposed by the Internal Revenue Service (IRS) that impact certain types of DAF contributions, including those to support the University of Iowa Athletics Department.
A contribution to qualifying DAFs (often held at community foundations) is treated by the IRS as charitable contribution at the time of the contribution to the DAF. The donor may then advise to which charitable organization(s) distributions are made, such as to the UI Foundation. Certain laws and IRS regulations prohibit a donor, donor advisor, or their family member from receiving more than incidental benefits as a result of the DAF distribution. The potential consequences of receiving impermissible benefits include jeopardizing the tax-exempt status of the entity maintaining the DAF and imposing significant excise taxes on the donor and/or their family member.
One of the impermissible benefits for a donor or family member to receive as a result of a gift made through a DAF is the right to purchase athletic tickets. Gifts to the I-Club at all membership levels provide member courtesies including the opportunity to purchase UI Athletics tickets. Therefore, neither the UI Foundation nor UI Department of Athletics may accept a gift made through a DAF for I-Club membership, even if the donor ultimately chooses not to purchase the tickets.
Importantly, a donor may still support the UI Department of Athletics through a DAF gift if the donor declines all benefits that would otherwise be provided as a result of the gift. These gifts are directed into a UI Foundation fund that does not afford any donor benefits and provides unrestricted support to the UI Department of Athletics. To learn more about supporting the UI Department of Athletics with a DAF gift, please contact the I-Club at (319) 467-3410 or firstname.lastname@example.org. For specific information regarding your legal or tax situation, please consult your own professional advisor.