Vanguard Charitable Endowment Program Focuses Offer, Reduces Total Fees up to 45% for Some Donors.VALLEY FORGE Valley Forge, on the Schuylkill River, SE Pa., NW of Philadelphia. There, during the American Revolution, the main camp of the Continental Army was established (Dec., 1777–June, 1778) under the command of Gen. George Washington. , Pa. -- The Vanguard Vanguard Any of three unmanned U.S. experimental satellites. Vanguard I (1958), the second U.S. satellite placed in orbit around Earth (after Explorer 1), was a tiny 3.25-lb (1.47-kg) sphere with two radio transmitters. Charitable Endowment A transfer, generally as a gift, of money or property to an institution for a particular purpose. The bestowal of money as a permanent fund, the income of which is to be used for the benefit of a charity, college, or other institution. Program today announced significant reductions in administrative and investment fees for qualifying donor-advised fund accounts, as well as a lower threshold that will allow more participants to benefit from the new fee structure. These changes will increase the monies available for grants to public charities nationwide. The new administrative fees will become effective July July: see month. 1, 2006. On the same date, the Program will extend eligibility for reduced fees to all accounts with balances of at least $1 million. (Currently, eligibility is limited to accounts holding $5 million or more.) In addition, effective October October: see month. 1, 2006, all qualifying accounts will benefit from a substantial reduction in investment fees. "The Program has always stressed the importance of knowing and understanding all of the costs related to donor-advised funds, and administrative fees and investment fees are the main components," said Ben Pierce Pierce may refer to: Places
The fee reductions reinforce the Program's status as a value leader among organizations offering donor-advised funds. Donor-advised funds are charitable giving vehicles that offer immediate tax deductions Tax deduction An expense that a taxpayer is allowed to deduct from taxable income. tax deduction See deduction. to donors, yet allow several years for planning and potential account growth before any portion of the donation must be distributed to charities. Distributions are based on recommendations by the donors or other authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: parties. The total average account costs under the new fee structure are shown in Chart 1 below. Chart 2 provides examples of total fees for qualifying accounts.
Chart 1: Total Average Annual Fees for Qualifying Accounts
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Fee Tier Annual Average Total
Admin. Fee Annual Average
for Tier Investment Annual Fee+
(starting Fee (starting (starting
7/1/06) 10/1/06) 10/1/06)
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Assets from $0-$1 million 0.57% 0.13% 0.70%
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Additional assets from
$1-$5 million 0.25% 0.13% 0.38%
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Additional assets from
$5-$15 million 0.15% 0.13% 0.28%
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Additional assets from
$15-$50 million 0.10% 0.13% 0.23%
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Additional assets
more than $50 million 0.05% 0.13% 0.18%
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+ Accounts with balances below $1 million are not eligible for reduced
fees. The total average fee for these accounts will remain at its
current level of 0.79%. Accounts with balances below $15,000 will be
assessed an additional $100 maintenance fee annually in March.
Chart 2: Total Fee Examples for Qualifying Accounts
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Account Total Effective Average Effective Effective
Balance Annual Admin. Fee Investment Total Total
Admin. Fee Rate for Fee (after Average Average
(after Balance 10/1/06) Fee (after Fee
7/1/06) (after 10/1/06) (before
7/1/06) 7/1/06)
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$1.5 million $6,950 0.46% 0.13% 0.59% 0.79%
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$3 million $10,700 0.36% 0.13% 0.49% 0.79%
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$7.5 million $19,450 0.26% 0.13% 0.39% 0.57%
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$20 million $35,700 0.18% 0.13% 0.31% 0.43%
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$75 million $78,200 0.10% 0.13% 0.23% 0.35%
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As shown in Chart 2, accounts in the $3 million range will benefit from a total average fee that is nearly 40% lower than the current total average fee. Depending on investment allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as , the total fee for a $3 million account could drop by more than 45%. The minimum total fee reduction for qualifying accounts will be about 7%. As an additional enhancement, the Program is planning its first pool allocation change. Effective October 1, 2006, the Total Bond Pool will be comprised solely of Vanguard(R) Total Bond Market Index Fund. The Total Bond Pool currently contains two specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. bond funds, and this change will broaden the pool's investment diversity while it simplifies tracking of the pool's performance. The Vanguard Charitable Endowment Program is a public charity established to support and increase philanthropy philanthropy, the spirit of active goodwill toward others as demonstrated in efforts to promote their welfare. The term is often used interchangeably with charity. across the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . The Program's donor-advised fund serves individual and corporate donors who are seeking a simple, low-cost way to coordinate their philanthropic phil·an·throp·ic also phil·an·throp·i·cal adj. 1. Of, relating to, or marked by philanthropy; humanitarian. 2. Organized to provide humanitarian or charitable assistance: planning. Upon contributing cash or marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has to the Program (minimum $25,000), donors receive an immediate tax deduction and may then recommend grants to qualifying public charities of their choice over time. The Vanguard Charitable Endowment Program is the second-largest donor-advised fund program in the United States as measured by annual contributions and invested assets. While the Program was founded by The Vanguard Group and shares many of its values, the Program is a separate, independent organization governed gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. by its own Board of Trustees board of trustees Politics The posse of thugs who oversee an institution's administration. See Board of directors. . With more than 5,000 donors, $1.2 billion in assets, and $850 million in grants to public charities since its inception in 1997, the Program is among the 30 largest charities in the nation. Note to Editors: Charts of annual assets, contributions, and grants are available upon request. |
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