Fidelity Charitable Agency Agreement
Impact on other local community foundations with donor-advised funds: Fidelity Charitable is the largest fund of its kind in the world (over $16 billion), so it has resources for litigation and much in their general charitable fund. I wouldn`t be surprised if this case is finally settled and Fidelity ends up transferring millions of dollars to the donor`s charities (we probably never will know). The complainants called in nine lawyers. Since this case has survived a request for dismissal, the legal fees are probably six figures before they even go to court. Local community foundations do not have to waste these kinds of resources, and even if they do, it would negatively affect all other local charities in the community that support them. This case should act as a deterrent if donors have specific investment management objectives for their donation, even if we never make a public decision on the case. As soon as a major case goes beyond a request for dismissal and summary judgment, you have already lost to a large extent. The Fidelity Investments Charitable Gift Fund (Fidelity Charitable) is the largest public charity in the United States and has more than $30 billion in assets under management since 2019. Fidelity Charitable was the first commercial donor fund provider (DAF) to manage non-profit accounts through which donors can, over time, distribute gifts to charities of their choice, while receiving immediate tax benefits. From 2020, Fidelity Charitable manages fund accounts for nearly 250,000 donors. If there are very strict restrictions on the sale of the share given at the time of the donation, should it not be assessed with a discount for deduction of income tax? To quote the IRS publication, Fidelity “has a veto only if the donor attempts to use the funds for improper or non-public purposes,” the court said. Third, consider how fundraisers are compensated.
In this case, FMR sounds like a “professional fundraiser” under many state laws, since the master service contract paid FMR to raise funds on behalf of Fidelity Charitable. This would subject the RMRs to registration and reporting obligations in different countries. Did the RMRs and, ultimately, the people working for FMR cooperate with the Fairbairns on the basis of the funds raised? If so, did the prospect of a higher payment contribute to the alleged legal actions that led to this legal action? What would an attorney general learn in the event of an investigation? Tax effects: if such restrictions actually existed for the control of the charity, as claimed by the complainants/donors, would they be entitled to a deduction from charitable income tax? See LERC 170 (f) (18) (B). If the terms of their gift were comparable to those of other funds recommended by donors, they should be, but the applicant/donors seem to claim a level of control that goes beyond what is normally granted in the DAF agreements. In the absence of sufficient control, the entire tax deduction may be threatened. Fidelity asserted that the complainants` tax position is even concluded in a collateral manner by other claims in this area, which appears to be a colourful argument. Here is the District Court`s response to this argument by rejecting Fidelity`s summary judgment: “So if the Fairbairns prove that Fidelity Charitable made the legally enforceable undertakings and that Fidelity Charitable is right to disqualify the gift of a charitable tax deduction to claim an inadmissible deduction.” In the spring of 2020, when the COVID 19 pandemic reached the United States, Fidelity Charitable compiled a list of organizations in immediate need of funding to guide donors who wish to increase donations to charities.