Think of a DAF as your charitable checking account. You put assets in, get a tax write off, THEN you disperse the assets to non-profits over time as you see fit.
Important notes:
Funds in a DAF can be split between multiple nonprofits if you want.
You get the tax write-off in the year you fund the DAF, but there is no requirement on how soon you need to make payments out of the account.
Assets in a DAF are invested and ideally growing until you “write the checks”.
EXAMPLE: A donor funds $50k into a DAF in 2023. They receive a tax write off of the full $50k. They then use the assets to complete their charitable giving over the next 10 years. They do not get further tax benefits, but the $50k in 2023 was enough to push them above the standard deduction whereas the $5k they donate annually would have provided zero tax benefits.
DAFs can be used in a family setting or by an individual. They can be funded with cash, assets, appreciated stocks… almost anything! The grantor can name a charitable beneficiary to receive funds at their death, or they can name a successor advisor – allowing them to pass their philanthropic intentions on to their kids… and creating a charitable legacy at death.
Donor Advised Fund
WHAT is a Donor Advised Fund or DAF?
Think of a DAF as your charitable checking account. You put assets in, get a tax write off, THEN you disperse the assets to non-profits over time as you see fit.
Important notes:
EXAMPLE: A donor funds $50k into a DAF in 2023. They receive a tax write off of the full $50k. They then use the assets to complete their charitable giving over the next 10 years. They do not get further tax benefits, but the $50k in 2023 was enough to push them above the standard deduction whereas the $5k they donate annually would have provided zero tax benefits.
DAFs can be used in a family setting or by an individual. They can be funded with cash, assets, appreciated stocks… almost anything! The grantor can name a charitable beneficiary to receive funds at their death, or they can name a successor advisor – allowing them to pass their philanthropic intentions on to their kids… and creating a charitable legacy at death.
If you would like to learn more about DAFs, send a request to admin@militarymissions.org.