Gifting With A Strategy

September 26, 2023

We have the privilege of working with many generous clients who routinely give to their favorite non-profit organizations in order to create a legacy of giving for their families and a culture of giving in their communities. Often, we talk through how to organize this giving strategy. Giving back has never been more important and donor-advised funds (DAFs) are a flexible and effective tool for individuals and families to manage their charitable giving. DAFs can help you make a meaningful impact on the causes you care about.

What is a Donor-Advised Fund?

A Donor-Advised Fund is a charitable giving account offered by a sponsoring organization, such as a foundation or financial institution. Donors contribute assets to their DAF account, receive an immediate tax deduction, and then recommend grants to qualified nonprofit organizations over time.

The Benefits of Donor-Advised Funds

  1. Tax Efficiency

One of the most significant advantages of DAFs is the potential for immediate tax benefits. When you contribute assets to your DAF, you can claim a tax deduction in the same year, reducing your taxable income.

  1. Flexibility

DAFs offer significant flexibility. You can contribute various types of assets, including cash, securities, real estate, and appreciated assets like stocks. This flexibility allows you to maximize your giving potential while minimizing your tax liability. While you can claim the tax deduction in the year of contribution you have the capability to distribute the assets from the DAF over time and to multiple nonprofits.

  1. Administration

Managing charitable contributions through a DAF is a lot less complex than other formal giving strategies. Account set up and administration of gifts is a simple process that avoids the complexity of other modes of giving such as setting up a foundation or charitable trust.

  1. Asset Growth

Your contributions to a DAF are invested, providing the potential for your charitable assets and their impact to grow over time. This means more resources available for charitable giving in the future.

How Does a Donor-Advised Fund Work?

  1. Establishing Your DAF: We set up your DAF account with a sponsoring organization. This will involve a minimum initial contribution.
  2. Contributions: Contribute assets to your DAF, taking advantage of the immediate tax deduction.
  3. Investment: We invest your DAF based on your preferences, with the potential for growth.
  4. Grant Recommendations: You recommend grants to qualified charitable organizations.
  5. Record Keeping: The sponsoring organization manages all administrative tasks, including record-keeping and grant distribution.
  6. Impact: You watch your charitable impact grow as you continue to recommend grants to organizations that matter to you.

Tips for Effective Donor-Advised Fund Giving

  1. Set Clear Goals: Define your philanthropic mission and specific goals for your charitable giving.
  2. Research Charities: Take the time to research the nonprofits you plan to support to ensure they align with your values and goals.
  3. Consider Long-Term Impact: Think about the long-term impact you want to make and how your DAF can support ongoing initiatives.
  4. Engage Family: Involve your family in the decision-making process to pass on the value of philanthropy to future generations.
  5. Regularly Review Your DAF: Periodically review your DAF's investment performance and grant recommendations to ensure they align with your objectives.



In conclusion, Donor-Advised Funds are a powerful tool for individuals and families who wish to make a lasting impact through charitable giving while enjoying tax benefits and flexibility. By understanding how DAFs work and following best practices, you can amplify your philanthropic efforts and contribute to positive change in the world. If your family can benefit from a DAF please let us know and we would be happy to discuss the details with you.