Click on any of the below FAQs to expand and read more. We also have a number of FAQs for donors here - from who they can donate to, fees, minimums, adding to their account and more.
+ Can a donor withdraw money from their gift account?
No. A donation to The Gift Trust is an irrevocable gift that cannot be returned. When it is donated, it becomes legally owned by The Gift Trust (this enables the donor to access the immediate tax credit). However, donations are made from the account based on the donor’s recommendations of the charities they want to support.
+ How much money does a donor need to open a Donor-Advised Gift Account?
For Gift Accounts managed by a financial adviser, the account needs to be over $20,000. Clients wishing to donate smaller amounts can do so through The Gift Trust. Accounts under $20,000 do not receive investment returns and cannot be managed for growth by a financial adviser.
A Donor-Advised Gift Account is a viable option for both large and small givers.
+ What are The Gift Trust's administrative fees?
The Gift Trust incurs expenses in operating our Gift Accounts. These include donor services, support, resources, statements, communications, grants administration, and online services. To cover the costs associated with these services, we apply an account administrative fee, as a percentage of the value of the assets in a fund.
We may also charge additional fees for legal and professional services in connection with special granting requests or additional philanthropic advice.
Fee schedules vary depending upon adviser network agreements, the cost of the custodian platform, and the size of the Gift Account. See our fee schedule here or, if applicable, refer to your network agreement. To find out more, call us on 04 391 4438.
+ How do advisers get compensated for their work?
Investment advisers receive compensation via investment management fees or commissions in much the same way advisers are paid for managing their client’s personal investments.
+ How much cash should be held in a liquidity account?
The Gift Trust requires 2% of each Gift Account’s assets to be held in cash. Think of this part of the donor’s account as a cash reserve, from which cash is distributed for fees.
We also recommend discussing with the donor what they intend to donate in the year ahead so that the right amount of cash can be made available when required. As a rough indication, donor advised accounts overseas have an average spend down of 15% per year.
+ Can I recommend investments?
Yes, the financial adviser manages the investments of funds in their client's gift account. Assets may be invested in a wide variety of investments, as long as it remains in line with the donor’s wishes and The Gift Trust's investment guidelines.
+ What criteria are used to determine the investment guidelines for the investments in a fund?
The donor will outline their investment preferences with their adviser when they set up their account and these will need to be approved by The Gift Trust. In general we will accept the investment preferences of donors as long as they fall within The Gift Trust's Investment Guidelines and do not cause us any reputational risk.
Relevant factors for the donor to consider may include the fund’s time horizon, liquidity concerns, grant making considerations, and legal constraints.
+ What are the contribution and balance requirements?
Individuals, as well as organisations or businesses, can open an account with a minimum of $20,000 if they wish it to be managed by an investment adviser. After the initial contribution, they may make contributions of $100 or more at a time.
+ Where are you based?
The Gift Trust is based in Wellington but operates across the country. We are a registered New Zealand charity.
+ Does The Gift Trust compete with advisers?
No. Our business model does not compete with advisers. We provide Gift Account fund administration and philanthropic advice services, while the adviser acts as investment manager. Occasionally, we will have donors who come directly to The Gift Trust (not via an adviser) and will select their investment approach.
+ Will The Gift Trust employees speak personally with my clients?
We encourage advisers to participate in conversations directly with the client regarding portfolio investment. In most cases, advisers feel comfortable with our staff speaking directly with their clients concerning grant-making matters.
+ Can a donor add money to their Donor-Advised Gift Account?
Yes. They can choose to fund their Donor Advised Gift Account through one lump sum donation or a recurring donation.
+ Who makes the decisions on where to make donations?
As it is donor-advised, the donor chooses the charities they care about most and submits donation recommendations to us. We will follow these recommendations unless there is a specific reason why we can't, such as the organisation not having a charitable purpose. We would then discuss this with this client to find a solution.
Our staff and trustees do the “due diligence” research to make sure the cause they choose is registered as a charity and is financially solvent. The Gift Trust has legal ownership of the Gift Account funds (this allows the donor to access their tax credit), but the donor adviser provides advice on donations based on their preferences.
If donors wish, The Gift Trust can also provide research and guidance to your clients to help them better select which charities to direct their funds to and support the development of a philanthropic strategy.
+ Is there an annual gift spending requirement?
There are no annual gift spending requirements. We will prompt donors to make a donation if we haven't received any advice from them after five years.