What is a Donor Advised Fund?
A Donor Advised Fund (DAF) is a charitable fund that allows you to optimize your giving. This type of fund lets you make a charitable gift, receive an immediate tax deduction and then recommend grants over time. The Community Foundation of Shelby County has been administering these types of funds for decades. With our expertise, we can help create a DAF that is uniquely for you. You can create this type of fund to engage your children and grandchildren in the giving experience or to give anonymously, honor a loved one, carry on a legacy, or to offset a tax liability. This type of fund can be set up by individuals, families, companies, organizations, or foundations.
Establishing a DAF is easy. There is no set-up charge, and the Foundation has low annual fees. Once you establish the fund, your contribution is placed into a DAF account where it can be invested and grow tax-free. Market appreciation results in even more money for your favorite charities. Choose from three investment portfolios with varying risk and return strategies.
You can set up a DAF by signing a customized agreement and by making a tax-deductible gift. Gifts can be added at any time, even through your will if the fund will continue after your death. Once the fund is established you (the donor advisor) may recommend grants at any time, in any amount, to qualified charities throughout the United States. No annual payout is required with a DAF.
Advantages of Donor Advised Funds:
- Instead of writing multiple checks to individual charities, you contribute into one simple charitable fund that issues grants (non-refundable payment to a charity) on your behalf.
- Recommend grants to a changing list of charities or your favorites.
- No set up fees and large cost savings when compared to a private foundation.
- Your contributions are invested with the potential to grow tax-free and make a bigger impact.
- As a 501(c)(3) charity, gifts to the DAF are deductible to the highest level allowed by the IRS.
- Grants to charities can be made in your name or anonymously, depending on your preference.
- Different types of assets are accepted. Some may mean even more tax savings for you.
- Great way to involve your family or others in your charitable giving.
- Ability to name your fund, such as the Joseph and Jane Smith Family Foundation.
Contact us today, and find out more on how you can optimize your charitable giving through a DAF.