For So Many Reasons, a Donor Advised Fund May Be Right for You

By Chris Askin CSPG, CFRE
President & CEO

Periodically I write on the topic of Donor Advised Funds to continue to spread the word about the benefits and convenience of these funds. You’ll commonly see these funds referred to by their acronym, DAF.

Why consider establishing a Donor Advised Fund? Let’s say you want a simple way to optimize your giving. Or perhaps you are experiencing a one-time financial or tax event that calls for making a large charitable gift. Or you’re looking for a way to make your philanthropy a family venture. These are just a few scenarios well suited to establishing a named Donor Advised Fund at the Community Foundation of Northern Nevada. 

You can add to a Donor Advised Fund any time, in any amount, and there are tax advantages as well. That’s why so many people find these funds to be the right choice for them as individuals, for their families, or for their business.

You don’t need to make huge gifts to realize the benefits of a DAF. You just need to be philanthropically inclined – a person who gives to charity, which may include your favorite nonprofit organization, school, arts organization, or church.

Because of their popularity, Donor Advised Funds have become an important part of mainstream giving. I’d encourage everyone to consider setting one up.

And I’d be remiss if I didn’t point out the wonderful advantage, through the Community Foundation, of the philanthropic advising that donors receive from our expert staff to help them achieve the intended impact from their giving. I’m so proud of our team – they’re knowledgeable people who are easy to talk with and happy to answer any questions you may have.

As the number of Donor Advised Funds continues to increase across the country, one of the great benefits is that virtually every professional advisor knows about them and has seen the benefits for their clients. For advisors who are reluctant to talk with their clients about charitable giving for whatever reason, telling clients about the benefits of DAFs is an easier conversation.

Perhaps the best reason for setting up a Donor Advised Fund is to take advantage of the tax savings by gifting appreciated assets to your DAF. In addition to the charitable gift deduction that ties to your tax bracket, you may save an additional percentage. Such savings could allow you to give the same amount for less cost or to increase your gift without it costing more.

In addition, many donors time their gifts to coincide with their DAF to reduce their tax liability in high-income years or when they have a significant taxable event. Many donors make gifts to their DAFs of assets that aren’t providing them with income, much the same way that people gift assets to charitable trusts. And gifts can be smaller than those typically made to charitable trusts.

If you’re a donor, exploring how a DAF might fit in with your charitable giving can bring about significant benefits to your financial planning. Many surveys have confirmed that the typical donor becomes more charitable once they are enjoying the benefits of having a Donor Advised Fund.

Because of their popularity, DAFs have become an important part of mainstream giving. I’d encourage everyone to consider setting one up. To learn more, see our informational page on Donor Advised Funds at nevadafund.org. Or call (775) 333-5499 or feel free to email us at info@nevadafund.org today. 

Connecting People Who Care With Causes That Matter

August 7, 2021