WIS welcomes contributions made via donor-advised funds (DAFs). In recent years DAFs have become an increasingly common vehicle for charitable giving—the fastest-growing form of philanthropy today, according to a 2021 study by the National Philanthropic Trust. DAFs are individual charitable investment accounts established via a donor's irrevocable contribution to a public charity, like Vanguard Charitable or a community foundation. Donors can then recommend grants from their account to nonprofit organizations of the donor’s choosing.
DAFs can offer several benefits:
Contributions to a DAF are eligible for immediate tax deduction, even if the funds are not disbursed right away. Donors have the flexibility to make gifts on their own schedule—and have the option to invest DAF funds and let them grow tax free until disbursement. Unlike private foundations, DAFs typically do not have a minimum annual distribution.
Donors can contribute appreciated securities directly to a DAF, without paying capital gains tax which would have been incurred had they sold the securities prior to transfer. DAFs are also not subject to estate taxes.
DAFs also offer administrative convenience, particularly for donors who support a wide range of charities, by consolidating statements and performing due diligence on eligible recipients. Likewise, setup is generally easy and costs low.
The above material is for informational purposes only. Always consult a qualified tax professional regarding your specific situation.
