The following article was published in the July 26, 2023 issue of the Jewish Community Voice:
Donor advised funds have taken off in popularity in recent years because they provide many benefits for philanthropists of all stripes.
Briefly, an individual, couple, family, or even an organization can establish a donor advised fund (DAF) with the Jewish Community Foundation, Inc. and streamline their charitable giving efforts. Once the fund is opened, anyone can contribute cash, appreciated stock, or other assets into the fund and gain immediate tax benefits for the charitable contribution.
There is no minimum to open a fund, but the JCF recommends having at least $2,500 in the fund at some point during the year. Then, the JCF professionally invests the fund’s assets based on the donor advisor’s choice from four different portfolio options. From there, the donor advisor can recommend grants from the DAF at any future time to any qualified 501(c)(3) charitable organization, with a low minimum of $100 per grant recommendation.
In addition to tax benefits, a DAF helps donor advisors:
• Reduce record-keeping since the JCF tracks contributions to and distributions from the fund.
• “Bunch” charitable giving into one year in order to surpass the federal standard deduction, and then initiate future grant recommendations when ready.
• To potentially give more money charitably, as the fund investments may increase in value, tax-free, over time.
• Maintain anonymity if so desired.
• To set aside charitable dollars to support emergency causes, or to save up a pot of dollars during one’s working years and then process grant recommendations during retirement.
• Involve family members or other loved ones in collaborative charitable giving, even passing the fund from one generation to the next.
In sum, DAFs provide important versatility for donors that is not possible when giving from a checkbook.