Donor Advised Funds (DAFs)
A Strategic Tool for Tax-Smart Charitable Giving
Donor Advised Funds (DAFs) have become an increasingly popular and valuable planning vehicle over recent years. They can be beneficial in many circumstances, allowing you to optimize tax planning as you fulfill your philanthropic goals and support the causes that matter most to you.
Key Benefits
DAFs provide immediate tax deductions when you contribute, while allowing you to recommend grants to charities over time. This creates several strategic advantages:
Tax bunching - Concentrate multiple years of giving into high-income years for maximum deductions
Appreciated assets - Donate stock directly to avoid capital gains while getting full fair market value deduction
Timing control - Separate your tax planning from charitable distribution timing
Estate planning - Create structured giving plans and charitable legacies
DAFs work best for substantial, regular charitable givers. For modest giving or when you want to benefit both charitable and non-charitable beneficiaries, direct donations or charitable trusts may be more appropriate.
Our flowchart below will help you think through your charitable goals, tax planning scenarios, funding strategies, and the basic mechanics of DAFs to determine if this tool makes sense for your situation.
Donor Advised Fund Guide Download here
While checklists and flowcharts can help you identify different opportunities, we are always available to meet with you to discuss your financial needs and goals, and help to identify what the best opportunities are for you.
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