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  • 1.  DAFs that come as grants?

    Posted 01-12-2026 02:28 PM

    Hello!

    I had a situation today where we had received a six-figure DAF ACH payment via Fidelity that came with grant terms and conditions from the donor advisors. The Donor advisors do have a foundation and the foundation makes grants. This gift was not described by Fidelity as being any different than the other gifts we received in the same spreadsheet that day and the donor advisor was not listed as a foundation but as the two individuals. 

    Have others experienced this? Is this allowable and legal? We are always so careful with DAF gifts and making sure that everything is handled with care so as to not put the university, the donor, or the DAF at risk, and this just felt off to me.

    Thanks for letting me know if this is something others have seen before.

    Rebecca

     



    ------------------------------
    Rebecca Swartz (she/her)
    Director of Gift & Data Management
    The University of North Carolina at Chapel Hill
    rebecca.swartz@unc.edu
    ------------------------------


  • 2.  RE: DAFs that come as grants?

    Posted 01-12-2026 02:35 PM
    As the funds belong to Fidelity - not the advisors - I would contact Fidelity and share the specifics of the conditions being suggested by the advisors. As long as there are no strings attached or QPQ, I doubt Fidelity will be concerned. But it's best to ask them.

    Do keep in mind, though, that even if it passes muster with Fidelity, the grant cannot satisfy a binding pledge.

    John

    John H. Taylor, Principal
    John H. Taylor Consulting, LLC
    2604 Sevier Street
    Durham, NC     27705

    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987






  • 3.  RE: DAFs that come as grants?

    Posted 01-12-2026 02:48 PM

    Thanks, John. The LOU indicates that they intend to recommend grants up to a larger number than this first payment (and they reference donor advised funds), and that the LOU is not a legally binding pledge. 

    There are conditions in the LOU including but not limited to:

    *Grantee will maintain records of receipts of and expenditures of the Grant and will keep these records during the Term and for at least five (5) years thereafter.

    *The return of remaining funds if the LOU is terminated

    Based on the LOU, the funds have been assigned to Sponsored Research as a grant (as they should be since this is grant language), but the funds are coming from a DAF, which to me means that they should be an outright gift, should they not? I will definitely contact Fidelity, I just wanted to see if anyone disagreed before I did so and potentially upset a donor as a result of any fallout.

    Thanks again!

    Rebecca



    ------------------------------
    Rebecca Swartz (she/her)
    Director of Gift & Data Management
    The University of North Carolina at Chapel Hill
    rebecca.swartz@unc.edu
    ------------------------------

    Original Message


  • 4.  RE: DAFs that come as grants?

    Posted 01-12-2026 03:05 PM
    Well, I think you have stumbled upon a bigger issue.

    Just because a donor uses the word "grant" does not mean it must go through Sponsored Programs. And most assuredly, if the only requirements are recordkeeping and annual reports, there should be no assigned overhead.

    The CASE Standards address this to some extent by discussing gifts, grants, and contracts.

    At Duke, we used the following to describe when a grant needed to go through sponsored programs:

    A specific project for current operations restricted for scientific, technical, and humanistic investigation that is externally funded, requires a financial report and a report on the results of the research (as opposed to a narrative report on program activities), and has definite research objectives, an expectation of reportable results, and a separate, specific budget.


    As an example, the Kresge Foundation issues "grants." That's what they call them. But I haven't seen Sponsored Programs take control of those just because Kresge mentioned the word "grant."

    You also probably know that many matching gift programs use the word "grant" when issuing their matches. Those certainly do not go through sponsored programs!

    I am happy to discuss this topic further with you offline if desired.

    John

    John H. Taylor, Principal
    John H. Taylor Consulting, LLC
    2604 Sevier Street
    Durham, NC     27705

    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987





    Original Message


  • 5.  RE: DAFs that come as grants?

    Posted 01-12-2026 03:11 PM

    Thanks, John. I always approach the word grant with caution as donors/funders use it to mean gift more often than not. In this case, it is the reporting and specifics related to what the funding is being used for that threw me off. I appreciate your help, and if I continue to feel flummoxed, I will definitely take you up on that call. 

    With gratitude,

    Rebecca



    ------------------------------
    Rebecca Swartz (she/her)
    Director of Gift & Data Management
    The University of North Carolina at Chapel Hill
    rebecca.swartz@unc.edu
    ------------------------------

    Original Message


  • 6.  RE: DAFs that come as grants?

    Posted 01-12-2026 04:02 PM
    I believe one way to approach a case like this is to determine whether the funder is asking you to do something out of the ordinary - something you don't already, or occasionally, do for other donors (especially major gifts).

    Maintaining records of receipts and expenditures is pretty customary. So, too, is returning unexpended funds (well, not customary but not unusual).

    An institutional protocol that is jointly developed with Advancement, the Business Office, and Sponsored Programs, with standard terms and definitions, as well as a checklist for determining when certain payments go where, might be useful. We developed that at NC State when I was there. The covering memorandum - sent to Deans, Directors, and Department Heads, as signed by the VC of Advancement, VC of Finance and Business, and VC of Research & Innovation. The Chancellor was added as a CC. Sure, there were still times when we had to take a "vote" on a payment. But this document eliminated most questions.

    John

    John H. Taylor, Principal
    John H. Taylor Consulting, LLC
    2604 Sevier Street
    Durham, NC     27705

    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987





    Original Message


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