What is a Donor-Advised Fund? A Donor-Advised Fund (DAF) is a centralized charitable account that allows individuals, families, and businesses to make a tax-deductible gift to a public charity sponsoring a DAF. With a DAF, donors can recommend how their assets are invested and distributed to qualified public charities.
Benefits of Donor-Advised Funds:
- Immediate Tax Deduction: When you contribute to a DAF, you can take an immediate tax deduction for your charitable contribution, providing a financial benefit.
- Tax-Free Growth: The assets you donate to a DAF grow tax-free, allowing your contribution to potentially grow over time.
- Directed Grantmaking: As a donor advisor, you can actively direct how your donation is invested and which qualified public charities receive grants, aligning your giving with your values.
- Family Involvement and Legacy: DAFs enable multi-generational family engagement in philanthropy, allowing you to create a lasting family legacy of giving.
- Simplified Recordkeeping: DAF sponsors handle all administrative tasks, such as record-keeping, disbursements, and tax receipts, making your charitable giving more efficient.
- Flexible Timing: DAFs separate the timing of your tax deduction from your decision-making, giving you the flexibility to plan your giving strategy effectively.
- Tax Efficiency: Contributions to DAFs are immediately tax-deductible, and any investment growth within the fund is tax-free. By donating appreciated securities, you can eliminate capital gains taxes and support multiple charities with a single asset.
- No Startup Costs or Transaction Fees: Establishing a DAF incurs no costs, and once approved, 100% of your recommended grant goes directly to your chosen qualified public charity.
- Privacy Options: If desired, you can remain anonymous to grant recipients, ensuring privacy in your giving.
Important Considerations:
- Grant recommendations are subject to review and approval by the sponsoring organization.
- Most sponsoring organizations accept cash equivalents, securities, and select other assets.
- Grants can typically be recommended only to IRS-qualified 501(c)(3) or 509(a) public charities.
- The donor may not receive more than incidental benefits from the grants.
*Please note that a Qualified Charitable Distribution (QCD) cannot be made to a DAF.
Recommendation: Consider instructing your funds advisor to donate to USCHS. The tax ID#is: 52-0796820.
Start your DAF today to experience the simplicity, flexibility, and lasting impact of streamlined charitable giving.
