Donor-Advised Funds

A donor-advised fund (DAF) is a type of giving program administered by a third party that allows you to combine the most favorable tax benefits with the flexibility to easily support your favorite charities. It is created for the purpose of managing charitable donations on behalf of an organization, family or individual. An increasingly popular charitable vehicle, DAFs are an excellent way to both simplify your charitable giving and facilitate your strategic philanthropic goals.

How It Works

  1. Establish your DAF by making an irrevocable, tax-deductible donation to a public charity that sponsors a DAF program.
  2. Advise the investment allocation of the donated assets (any investment growth is tax-free).
  3. Recommend grants to qualified public charities of your choice.

Main Advantages of Donor-Advised Funds
Donor-advised funds provide a number of benefits that direct donations to a charity including:

  • Simplicity – The DAF sponsor handles all record-keeping, disbursements, and tax receipts.
  • Flexibility – Timing of your tax deduction can be separate from your charitable decision making.
  • Tax-efficiency – Contributions are tax-deductible and any investment growth in the DAF is tax-free. It is also easy to donate long term appreciated securities, eliminating capital gains taxes and allowing you to support multiple charities from one block of stock.
  • Family legacy – A DAF is a powerful way to build or continue a tradition of family philanthropy.
  • No start-up costs – There is no cost to establish a donor-advised fund. However, there are minimum initial charitable contributions to startup the DAF (typically $5,000 or more).
  • No transaction fees – Once approved, 100% of your recommended grant goes to your qualified public charity of choice. There usually is an administrative fee on the assets in a DAF.
  • Privacy (if desired) – Donors may choose to remain anonymous to the grant recipient.

For detailed questions on tax implications, please contact your financial adviser. If you have any DAF-related questions for our organization, please contact Linda Shedlofsky at 314-881-3523. Our Tax Identification number is: 27-1297885.

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