Is a Donor Advised Fund Right for You?

Is a Donor Advised Fund Right for You?

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Mary Quilici Aumack
Executive Director
Catholic Community Foundation of Santa Clara County

When you grow up in, and are nourished by, a community of faith, you develop an intense gratitude that manifests in a desire to “give back.” And in this valley, the “give back” is vast and important. Did you know that there is a way to give back that has both tax advantage and long-lasting impact? That is the Donor Advised Fund.

At our Catholic Community Foundation, a Donor Advised Fund (DAF) offers donors flexibility and efficiency in philanthropy both today and well into the future. A DAF also can offer the opportunity for families to discuss and pass on the values and joy in giving back to our community. Lastly, a DAF can create the foundation for a lifetime of philanthropy and a permanent charitable legacy.

What is a Donor Advised Fund? It is a fund that is created by a donation. Gifts of cash, securities, or other appreciated assets are gifted into a designated DAF. At the time of the donation, the donor gets a full tax deduction.

The donation creates a centralized, efficient, and online-accessible repository to manage charitable giving. The donor then recommends grants from the fund at any time, and can do so for a lifetime. Grants can be made to any 501(c)(3) nonprofit, provided their mission does not conflict with Catholic teachings. However, we recommend that a minimum of 25 percent of all recommended grants be to Catholic ministries in Santa Clara County. Grant recommendations may be made online via a secure fund portal that also keeps an ongoing record of all gifts into the DAF, as well as all grants directed out of the fund. 
Think of it as your online philanthropy engine, separating time of tax deduction from time of granting to specific charities.

During the lifetime of the donor(s), a DAF offers a centralized way for parents to involve children in philanthropic decision-making. We call this “Kitchen Table Philanthropy.”

Donors can invite children to participate in discussions about grant recommendations from the fund, and even consider allowing each child to recommend a certain amount of giving on an annual basis. In this way, future generations share the joy of being philanthropic, as well as witness first-hand the parents’ commitment to helping those in need.
Unlike a private family foundation, there are no minimum distribution requirements from a Donor Advised Fund. There is also no separate reporting required.

Many donors actively use a DAF during their lifetime while building resources – which grow tax-free – to create a permanent “legacy” endowment after they pass away. This endowment then provides a permanent source of support to the charitable causes closest to the donors’ hearts. In this way, a Donor Advised Fund can be the first step in establishing a family tradition of philanthropy that can be carried on from one generation to the next, with a Family Endowment.

Why partner with the Catholic Community Foundation for your DAF? Here we have one mission: to provide FOREVER VALUE to Catholic Ministry through Endowments, Donor Advised Funds, and Planned Giving. When partnering with us, you will learn of effective programs across the valley that may inspire you or your children.

Think of the Foundation as a conduit, that connects generous families with effective ministry.

If you have appreciated stock or other assets, a DAF could be an appropriate part of your philanthropic strategy.

To learn more please call (408) 995-5219 or send an email to aumack@cfoscc.org.