Below you’ll find answers to the questions we get asked the most about Groundswell.
Groundswell is an app that provides you with a Personal Giving Account to save money for charitable giving and distribute it to nonprofit organizations.
Your Personal Giving Account is powered by a Donor-Advised Fund (DAF) held within the Groundswell Foundation. DAFs have been used by wealthy people for decades to manage their giving, but you don’t have to be rich to have one with Groundswell. You just have to want to be strategic about your philanthropic goals and committed to making an impact with your money.
You can contribute money into your Groundswell account as often as you’d like, then advise donations out to the charities of your choice. There are no limits on how much you can save or distribute.
Utilizing Groundswell has several advantages versus giving directly to charities by check or via their website. First, Groundswell centralizes all your giving. Regardless of how many charities you support or over how many years, you’ll always be able to see the summary of that impact in your Groundswell account. Second, many charities are incapable of accepting non-cash contributions such as stock or crypto.
When you contribute those assets to Groundswell, we can liquidate them and make the full value of proceeds available to you to donate to your favorite charity – all while avoiding capital gains taxes that would reduce the amount you could donate. Third, Groundswell helps you identify and conduct research on charities that align with your interests – making it easier to have impact on the issues that matter most to you.
You can create a Groundswell account by downloading the Groundswell application from either the Apple App Store or Android’s Google Play. Once downloaded, all you need is a valid email address to create an account. Creating an account does not require you to pay or contribute funds to Groundswell.
Creating a Groundswell account, connecting a checking account, transferring charitable funds to Groundswell, and donating funds to charity is free. Groundswell will take 1% of donations made to charity on its platform to cover its fees.
Groundswell makes money several ways. Its primary revenue stream comes from licensing fees associated with the use of its software. Specifically, corporations pay Groundswell for access to its Enterprise Groundswell platform.
Groundswell also maintains a Services Agreement with the Groundswell Charitable Foundation (“the Foundation”), which is separately governed by an independent board of directors. Through this agreement, Groundswell is paid fair-market value fees associated with the management, investment, accounting, and distribution of funds held within the Foundation.
Groundswell Giving, Inc (“the Company”) is a software company incorporated in the State of Delaware, whose aim is to democratize philanthropy. Groundswell Charitable Foundation, Inc (“the Foundation”) is a nonstock corporation incorporated in the State of Delaware, and is recognized by the US Internal Revenue Service as a public charity (nonprofit organization) under Section 501(c)3 of the US tax code. The Foundation was incorporated for the sole purpose of providing Donor-Advised Funds (DAF) in a modern, accessible manner.
The Company and the Foundation have entered into a Services Agreement (“the Agreement”) that outlines the services the Company will provide the Foundation and the fair-market remuneration the Company will receive for those services. Services include software and mobile applications that facilitate the creation of DAFs for users, recommend charities to users, and facilitate distributions to recipient charities, among other services. The Company also manages all administrative requirements of the Foundation.
The Foundation is governed by a separate, independent board of directors, who annually review and approve the aforementioned Agreement and associated fees.
A Donor-Advised Fund (DAF) is a charitable giving vehicle administered by a public charity (in our case, Groundswell Charitable Foundation). Individuals or organizations that utilize DAFs contribute cash or other non-cash assets such as stock, into an account operated and maintained by the administering public charity. These contributions are considered irrevocable gifts (the donor cannot withdraw the funds for personal use), but donors retain advisory privileges over how the funds are invested and distributed to recipient charities. A donor’s initial contribution into the DAF is tax deductible, a major advantage of DAFs.
You can read more about DAFs here.
A Groundswell account is technically not a personal foundation. A personal foundation is a separately incorporated legal entity that has its own charitable tax-status designation from the IRS. Foundations also come with a multitude of complex legal, filing, and regulatory requirements.
Conversely, a DAF is an account held within an existing foundation (in our case, Groundswell Charitable Foundation, or GCF). DAFs have all of the same tax advantages of a personal foundation, but none of the administrative headaches.
For the sake of simplicity and familiarity of the term, Groundswell often refers to its accounts as personal foundations, though they do not technically meet that definition.
Groundswell users can fund their account by linking a personal checking account utilizing our integration with Plaid. By linking a personal checking account, users can make transfers to their account at any time, so long as they have sufficient funds available.
The minimum account contribution is $1, and there are no limits to how much you can contribute – you’re only limited by how generous you can afford to be!
A contribution is a transfer of funds or assets into your Groundswell account. This contribution is immediately tax-deductible and irrevocable. At any time after a contribution, a user can elect to distribute (or donate) those funds to a registered public charity.
Yes. Because a user’s account is a Donor-Advised Fund, Groundswell Charitable Foundation maintains ultimate control and discretion over the distribution of funds. Generally speaking, distribution recommendations to qualifying organizations that are made within the scope of permitted purposes will be approved. However, Groundswell Charitable Foundation’s board reserves the ultimate right to approve or deny a recommended distribution.
Each month, Groundswell updates its list of qualifying organizations utilizing data provided by the IRS and various third-party sources. For organizations that are not listed on the IRS’s Pub 78, Groundswell staff conduct due-diligence to ensure that the organization meets the IRS’s qualifying public charity standards.
Yes. Groundswell denies distributions to organizations listed by the Southern Poverty Law Center as hate groups. Groundswell Charitable Foundation further reserves the right, in its sole discretion, to deny distribution recommendations to organizations it determines are undertaking activities detrimental to the public interest.
In order to minimize the costs associated with processing payments to charities, Groundswell aggregates all recommendations made to a single charity in a calendar month and issues a single payment to that charity within seven business days of the close of that month.
Groundswell allows users to recommend distributions to charities immediately following a contribution. However, because certain payment methods – such as ACH – can take several days to settle between banks, Groundswell reserves the right to cancel a scheduled distribution if funds within a user’s account are insufficient at the time of distribution.
No. Groundswell firmly believes in empowering charities to execute their important work, and believes that charities are best positioned to determine how to utilize precious funds. Thus, all donations processed by Groundswell are received by the charity without restriction.
Groundswell’s allows users to control the amount of personal information that is shared with nonprofits. Groundswell’s default setting is to share an account holder’s name, Groundswell fund name, and email address.
Contributions made to Groundswell are immediately tax-deductible, regardless of when they are distributed or donated to recipient charities. Thus, in any given year in which contributions are made to a Groundswell account, a user that itemizes their taxes can deduct up to 60% of their Adjusted Gross Income (AGI) for cash contributions and 30% of their AGI for non-cash contributions (stock, crypto, etc). Read more about the tax implications of a DAF on our resource page.
Users will receive a single tax receipt for all prior-year contributions in the month of January.
If a user donates an appreciated asset, such as stock or crypto, that has been held for more than one year, the user can avoid paying capital gains tax on the appreciated gains (saving up to 25% of taxes on the appreciated value less the cost basis) while also being allowed to deduct the full fair-market value of that asset off their income taxes (up to 30% of Adjusted Gross Income). See our resource guide for more information on the tax benefits of DAFs.