Donor Advised Funds
The Outreach Foundation Trustees and staff have endorsed a collaboration with Presbyterian Foundation and National Christian Foundation to promote Donor Advised Funds (DAFs) as a tool to help many donors reduce taxes and increase gifts to qualifying charities of your choice over time.
Is a DAF right for you? According to the National Philanthropic Trust these investment accounts are growing in popularity. Perhaps the biggest advantage is the ability to make donations to your DAF and receive immediate tax benefits in the year you contribute to your DAF, while allowing yourself to make grant recommendations for these funds over your own timetable. You can even name an heir to manage this giving account beyond your lifetime if funds remain in the account. Remember, a DAF can have an investment component to grow beyond the amount originally deposited in your DAF.
To learn more about a DAF and what types of assets can be deposited in your DAF watch this short informative video from the Presbyterian Foundation.
Why collaborate with Presbyterian Foundation or National Christian Foundation? While the National Philanthropic Trust views DAFs as investment accounts with tax advantages, Presbyterian Foundation and National Christian Foundation also look at your DAF as your tool to leverage your giving from a Kingdom perspective.
Both collaborators are staffed with full-time experts in this area and have assets under management valued at billions of dollars. Both charge low annual management fees (capped at 1%)
Most community foundations or institutional providers require a minimum of $5,000 or more to open a DAF. PF only requires $2,500 and NCF has no minimum balance requirement
Both collaborators allow gift recommendations for as little as $100
If we take the standard deduction ($12K per single filers or $24K for joint filers) is there even any benefit to a DAF? Perhaps “bundling” your deductions every couple of years can lower your taxes, plus allow you to give more charitable gifts. See this easy-to-read article from Presbyterian Foundation to help you decide if bundling will allow you to save, plus share more.
What if we want to give a portion of our home or other real estate, is there an advantage by using a DAF? A DAF could be a very SMART way to lower your tax liability, plus increase the size of the gift to your family, plus increases the amount you will have in your DAF to give to your favorite charities. See these two examples from National Christian Foundation to see what would happen if you sell first then give cash, versus giving to your DAF first, then selling.
What if I’m going to retire and want to sell a portion of my business interests? Each year National Christian Foundation facilitates billions of dollars of complex transactions like this that can increase benefits to your family and your favorite charities. See these two examples, and if you are interested contact Ralph Wheeler to facilitate a conversation with an expert who can show you what happens if you give-and-sell versus give-and-hold.