12 Dec

Simplified Giving

December 12, 2007

Do you want to simplify your charitable giving plan?  Do you want the benefits of a family foundation without all of the complicated regulations?  If you answered yes, you may want to consider using a Donor Advised Fund (DAF).

DAFs have become very popular in recent years. The concept is quite simple.  An investor (donor) can open an account at a sponsoring company.  Fidelity and Vanguard each offer DAF accounts.  Our local community foundation also offers a DAF.  Once the donor opens and names the account, they can fund it with cash or appreciated securities.  Some companies allow other assets to be donated into the account.  Since the gift fund itself is a qualified charity, the donor gets a tax deduction when money funds the account.  Later, when the donor identifies a cause they would like to support, they request a grant be made from their account.  The sponsoring company researches the charity to make sure it is an approved charity.  As the name indicates, the fund is only donor advised.  The donor of the account advises the sponsoring company to make the grant.  Technically the sponsoring company is not required to accept the donor’s recommendation.  However, they usually make the recommended grants as long as the charity is qualified.  There are a number of advantages offered by a DAF.  They include:

Easy to make donations.  Most firms accept grant requests online.
Donors can fund the accounts with appreciated securities.  This reduces the need to transfer appreciated securities to each separate charity.
Grant histories are available online to track gifts.
Costs are significantly less than family foundations.
Donors can add money at any time.  This allows for additional contributions during higher tax years.
Want to learn more?  For further reference, please review the attached article on donor advised funds at the following link:


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