Donor Advised Funds

For a smaller initial contribution (as little as $5,000 to $20,000), there may be a more efficient and less costly alternative than a private foundation - such as the Donor Advised Fund (DAF). A DAF can have many of the same characteristics and attributes as a private foundation, but at a lower cost. The trade-off is in flexibility and control.

Donor Advised Funds are funds created by community organizations or certain financial institutions that allow your contributions to be accumulated in the fund instead of being immediately distributed to a charity. Unlike a private foundation, there is no 5% minimum distribution requirement. The fund may invest your contributions in various securities and other investments, typically in mutual fund-type investments.

• You may "advise" the DAF on the investment strategy for the contribution.
• When you deem it appropriate, you may "advise" the DAF to make distributions from the fund to a specific charity.
• The distribution does not have to happen in the year in which the donation is made.
• This has the effect of accumulating and growing your contributions over a period of time so that when the distribution is made, your "gift" to the specific charity may be larger than what it might otherwise have been.

With a DAF, you will get a tax deduction the year that the contribution is made, subject to the adjusted gross income limits previously mentioned.