Are you planning on giving back to your community?
One of the best ways to do so is through a Donor Advised Fund.
A Donor-AdvisedFund (DAF) is a philanthropic giving vehicle that allows individuals to contribute to their DAF, receive an immediate tax deduction, and then recommend grants from the fund to their favorite charities over time.
Through a Donor Advised Fund at the Catholic Community Foundation, donors can plan and execute their charitable giving in a streamlined and cost-effective way while supporting their communities and the causes they care about.
Advantages of Donor-Advised Funds
Donor-advised funds (DAFs) have become an increasingly popular choice for individuals and families seeking simplified yet efficient ways of making charitable donations.
The benefits of setting up a donor-advised fund are numerous, some of which are as follows:
1. Tax Benefits
Provides immediate tax deduction in the year you donate to your DAF. This is because contributions made to DAF accounts are tax-deductible as charitable giving, which can result in substantial savings for donors over time.
2. Flexibility
DAFs offer a high degree of flexibility to donors, as they may allow them to make contributions of various types of assets, from cash and securities to real estate and art.
This makes it easier for donors to give from their wealth while minimizing the burden of tax liabilities.
3. Investment Potential
DAFs at the Catholic Community Foundation offer the potential to grow assets over the long term by investing the funds in a professionally managed investment portfolio, in agreement with our Catholic faith.
Donors can access market gains and compound interest over time, translating into a larger pool of funds to support charitable causes.
4. Legacy Building
Finally, DAFs offer a powerful tool for building a lasting legacy of philanthropy.
By setting up a donor-advised fund, donors can involve future generations in their giving, benefiting from the support of tax benefits, streamlined giving, and flexibility to expand their philanthropic objectives over time.
DAF provide a low-cost alternative to a private foundation
How to set up a Donor Advised Fund
If you’re looking for a way to make a meaningful impact with your charitable giving, a Donor Advised Fund (DAF) at the Catholic Community Foundation may be an excellent option for you.
With a DAF, you make a charitable contribution to a fund that you then advise on how to distribute the funds to causes that matter to you. It’s like having your charitable foundation without all the administrative headaches.
Setting up a DAF with the the Catholic Community Foundation is easy It starts with making a gift – donate cash, appreciated securities, real estate or other assets. A current DAF from elsewhere can be moved to CCF. A private foundation can be closed and the assets moved to a donor advised fund at CCF.
Once your DAF is established, you can take your time in selecting which organizations to support and how much you’d like to donate to each one. It’s a flexible and powerful tool for anyone looking to make a difference.
For more on this, check out how to start a DAF with CCF here.
What is the difference between a donor-advised fund and an endowment?
When it comes to giving back to charitable organizations, various options are available. Two popular options are donor-advised funds and endowments.
A Donor Advised Fund allows donors to set aside funds for future gifts to charities and make recommendations on how those funds are distributed.
This gives donors more control and input on how and when their funds are utilized. On the other hand, endowments are permanent funds invested, and only the income earned is distributed to the charity.
While endowments provide a steady income stream for the charity, once the endowment terms are set, funds may be used by the person or persons designated within the agreement according to the purpose of the funds.
Bottomline
Donor-advised funds are an excellent option for donors looking to make a lasting impact on charitable causes.
It’s a fund that has many benefits which can appeal to many donors.
