Charitable Giving Made Simple & Strategic

SPECIAL GUEST CONTRIBUTOR: Gail Baer, Vice President of Philanthropy & Community Engagement at Center for Jewish Philanthropy of Greater Phoenix

Most of us think of charitable gifts as transactions paid with a credit card, check or cash. Select the charity, go to the website, click the donate button, and you’re done.

But what if you could make your charitable giving more personal, more intentional, and more strategic? And what if this effort not only impacted you but made a difference for multiple generations of your family? All that is possible when you establish a Donor Advised Fund.

What is a Donor Advised Fund?
A Donor Advised Fund, or DAF, is a charitable account for the sole purpose of supporting charitable and nonprofit organizations you care about. To open a Donor Advised Fund, you must select a sponsoring organization to manage the account. Community foundations or financial services firms manage the portfolio of the assets to grow the fund. Once you open your fund, you can decide where to distribute funds for charitable contributions.

Typically, a minimum contribution is required to start a Donor Advised Fund, and donors can make this charitable contribution through a variety of ways, including cash contributions, mutual fund shares, stocks, bonds, life insurance policies or other private equity assets. A Donor Advised Fund can reduce tax burdens after a windfall situation, such as selling a business or experiencing capital gains in the market. You can take advantage of an immediate tax deduction when you make your charitable contribution to your Donor Advised Fund, thus reducing your tax liability.

Assets in your Donor Advised Fund are invested, which increases the value of your fund over time. Investment growth is tax-free, thereby growing your fund for more philanthropy grantmaking.

Benefits of Donor Advised Funds
In addition to the tax benefits of this type of charitable giving, Donor Advised Funds place the decision-making squarely in your hands. You can take advantage of planning gifts into your fund when the timing makes sense for you, make allocations to organizations you feel passionately about, and create a legacy of giving that will impact organizations for years to come.

Personalize Your Giving
As soon as your Donor Advised Fund is created and funded, you can begin recommending grants to qualified, tax-exempt charitable organizations of your choice. You can choose to have your gift recognized or remain anonymous. In many cases, you can make a grant in memory of or in honor of someone, or support a specific program, project, or campaign. In addition, access to Donor Advised Funds can be managed online, and your fund is at your fingertips with an online portal.

Your Donor Advised Fund is the ideal vehicle for family philanthropy. Engage other family members, as appropriate, when establishing your fund. You can appoint others (usually adult children) as fund advisors to help you determine grantmaking from your fund. And if you’d like, you can even give the fund a name that is meaningful to you.

Planning for the Future
Upon establishing your Donor Advised Fund, design a legacy plan to determine what happens to the fund after your lifetime. This can be accomplished within the fund agreement by naming successor advisors for the fund to continue grantmaking from your fund on your behalf. Alternatively, you may distribute the assets outright to certain charitable organizations. Another after-lifetime option is to use the remaining amount in the Donor Advised Fund to establish a named endowment fund to benefit one of more of your favorite organizations.

Charitable Giving Made Simple AND Strategic
Donor Advised Funds are the perfect opportunity to prioritize your giving strategy. Talk to your spouse, partner, parents and children about what matters to you. Think about what changes you want to see in the world during and after your lifetime. Invest in causes that have meaning to you and that align with your personal values. This could be a combination of faith-based organizations, human services, civil rights, education, arts, healthcare and more. The choice is yours.

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