Donor Advised Funds (DAF) allow donors to give cash, stock and other assets and receive an immediate tax deduction when the contribution is made. Donors can later choose specific amounts to the charities of their choice.
How It Works
- Establish your DAF by making an irrevocable, tax-deductible donation to a public charity that sponsors a DAF program.
- Advise the investment allocation of the donated assets (any investment growth is tax-free).
- Recommend grants to qualified public charities of your choice.
Main Advantages of Donor Advised Funds
Donor Advised Funds provide a number of benefits whereas direct donations to a charity may not. These benefits include:
- Simplicity – The DAF sponsor handles all record-keeping, disbursements, and tax receipts.
- Flexibility – Timing of your tax deduction can be separate from your charitable decision making.
- Tax-efficiency – Contributions are tax-deductible and any investment growth in the DAF is tax-free. It is also easy to donate long-term appreciated securities, eliminating capital gains taxes and allowing you to support multiple charities from one block of stock.
- Family legacy – A DAF is a powerful way to build or continue a tradition of family philanthropy.
- No start-up costs – There is no cost to establish a Donor Advised fund. However, there are often minimum initial charitable contributions to establish the DAF (typically $5,000 or more)**
- No transaction fees – Once approved, 100% of your recommended grant goes to your qualified public charity of choice**
- Privacy, if desired – Donors may choose to remain anonymous to the grant recipient.
** Sponsoring organizations generally assess an administrative fee on the assets in a DAF. These fees vary by sponsoring organization.
What Can Donor Advised Funds Do for St. John’s Episcopal Hospital?
DAFs provide an easy, flexible, low-cost method of giving which supports quality healthcare for individuals throughout the Rockaways. These gifts are essential parts of the lasting changes we make in the lives of our patients in need through our services and programs. For example, you can also establish planned giving beneficiary designations as part of your estate planning and legacy philanthropy.