Donor-advised funds (DAFs) are a popular charitable giving tool. And right now is a perfect time to evaluate this planning strategy.
In recent years, DAFs have been one of the fastest-growing philanthropic planning tools in the marketplace. DAFs are popular because they allow an individual or family to make a tax-deductible transfer that qualifies as a charitable contribution, and then recommend grants to favorite charities from the fund when the time is right. A DAF operates like a checking account for charities. It is established according to IRS guidelines that provide tax advantages for the donor as well as administrative efficiencies.
Amid the COVID-19 pandemic, giving from DAFs at the Community Foundation is accelerating. This increase is creating a significant boost for nonprofits and people in need in Palm Beach and Martin Counties. Indeed, the global healthcare crisis is precisely why many donors establish DAFs in the first place: To be ready to give when needs are the highest.
From a national perspective, according to a recent survey conducted by the Community Foundation Public Awareness Initiative, 64 Community Foundations surveyed shared grants from DAFs increased by nearly 60% in March and April 2020 compared with March and April 2019. As noted by Bruce Hopkins, a University of Kansas School of Law professor, DAFs can be a vital “lifeline” for local nonprofit organizations during periods of hardship.
As a professional advisor, consider working with your clients to activate their existing DAFs or establish new DAFs to help respond to the needs created by COVID-19 and our current racial equity impacts. Learning about the destructive forces of racial injustice is a priority. You and your clients can use our new Racial Equity Hub to gain knowledge. We encourage you to urge your clients to do everything possible to become educated about racism in our communities and take action.
A DAF helps our community right now and allows your clients and their families to build a nest egg to address our community’s greatest needs during future crises."
A DAF helps our community right now and allows your clients and their families to build a nest egg to address our community’s greatest needs during future crises. Together, we can continue to improve the lives of ALL our community residents.
Please contact Abby Axelrod-Wunderman, Director of Charitable Giving at email@example.com or 561.340.4512, to learn more.