Create new Account type for Donor Advised Fund

David Johnson

For Schwab Charitable accounts, Quicken does enable tracking of buying and selling of investment products, and withdrawal (grant) events, current balances. However, there is no easy way to account for appreciate stock transfers into the account and count that transfer as a charitable donation of the correct value.

Users have created various workarounds to enter deposits or stock transfers into a Donor Advised Fund, and grants from those funds using dummy stock and cash accounts, manual entry of aquisition prices and current prices. All methods are cumbersome, prone to being forgotten and relearned each time they are done, manually entered and prone to errors, and create problems for category and tax reporting within Quicken.

Please create an Donor advised Fund type, which asks for the appropriate information for appreciated stock donations transferred in from a brokerage account, and correctly calculates the effective charitable donation type and amount. Furthermore, please allow tracking of grants (withdrawals) in a manner that does not affect budget reports or tax calculations.

This is a feature request for all Quicken Products

Jim_Harman

The ability to easily track and report on contributions to a DAF would also be useful for tracking charitable gifts of appreciated securities. I agree it is currently a complex and error prone process to enter those gifts correctly.

Currently the transactions that must be entered for a donated security are:

1. Remove the shares to be donated, specifying the lots to remove (usually the lowest cost lots you own)
2. Add the shares back, using today's market price and acquisition date
3. Sell the shares at the same price
4. Withdraw the cash proceeds, using an appropriate Category

This same process could be used for contributions to a DAF; step 4 would be a transfer to the DAF account.

I'm not convinced there is a need for a special account type for a DAF. It could currently be set up in Quicken as either an Investment or an Asset account, depending on whether you want to track the investments inside the account. With an Asset account, you could simply update the balance to reflect the current account balance. The Tax Schedule for transfers in would be set to Schedule A:Cash charity contributions. I would probably mark the account as Separate so that its value is not included in my net worth and other reports.

When a donation is made from the account, I would give it a Category for a charitable contribution, but separate from tax deductible contributions. For a comprehensive report on charitable contributions, I would customize the report to include the DAF account.

David Johnson

ScheduleA: Cash charity contributions works as an expense category, so if you write a check or otherwise make a donation to a charity from a normal account to a charity, this is logged as an expense and assigned to Schedule A as a charitable expense as well as any Quicken reports that track spending. However, if you assign transfers into the DAF as a Schedule A: Cash charity contributions, this shows up as a positive amount instead of a negative amount, which screws up the "Charity" category in your budgeting, as well as the summation of the ScheduleA: Cash charity contributions.

The workaround is to create an expense category called "Charity: Deposits into Donor Advised Fund" which is connected to Schedule A:Cash charity contributions. Use that category when making a contribution to the DAF. Then if you want to track the DAF in Quicken, create a DAF brokerage account that is excluded from all general reports to

1. Manually remove the shares to be donated, specifying the lots to remove (usually the lowest cost lots you own)
2. Manually add the shares back, using today's market price and acquisition date
3. Manually sell the shares at the same price (no impact on capital gains or losses, but will show up on Quicken transaction reports)
4. Manually withdraw the cash proceeds, using an appropriate Category (Charity: Deposits into Donor Advised Fund)
5. Manually transfer in the same cash figure into a dummy DAF Quicken account.
6. Manually track changes in values
7. Manually withdraw funds when grants are made

To keep the funny business (fake share additions, fake price adjustments fake share sales and fake cash withdrawals) out of the real brokerage account register, you can create a dummy brokerage acccount and a cash account for steps 2 through 4.

What Schwab records is that the shares are journaled from the brokerage account to the DAF. The DAF account shows that day's price, and then the shares are sold the next day at whatever that price turns out to be. Then the funds are invested in one of their DAF products as directed by the donor. Also Schwab correctly records all the subsequent transactions just as any brokerage account: the investment type, daily price fluctuations, buying and selling different asset types and the withdrawls (grants) when they happen. These are all downloaded correctly in Quicken, with the notable exception of the journaling. So steps 5-7 kind of work for the Schwab DAF.

Rather than do all those manual steps, I would like to see a DAF account type, where money/securities entering the account are counted correctly as a charitable contribution. Schwab DAF tranaction history shows the correct share price when stocks enter their system, so it shouldn't take much to get the Schwab DAF to provide the correct information automatically, to price the incoming shares correctly and assign the correct valuation as a charitable contribution. If you can't get Schwab to provide the correct valuation, then provide a dialog box to manually assign the correct share price.

Jim_Harman

However, if you assign transfers into the DAF as a Schedule A: Cash charity contributions, this shows up as a positive amount instead of a negative amount, which screws up the "Charity" category in your budgeting, as well as the summation of the ScheduleA: Cash charity contributions.

What I found is that if I set the DAF account as Tax Deferred, set the Tax Schedule for Transfers In to Schedule A:Cash charity contributions, and record the transfers in the taxable account where they originate (not in the DAF account), the transfers are recorded the same as other charitable contributions in the Tax reports.

In order for transfers to the DAF account to be included in the Itemized Categories report, the DAF account must be marked Separate or excluded from the report on the Accounts customization tab.