We recently welcomed guest speaker William (Bill) Hewitt, an Enterprise Account Executive at TIFIN, to walk us through the benefits of Donor Advised Funds (DAFs) in an informative Webinar. In case you missed it, here are some key takeaways.
TIFIN is an AI and innovation platform delivering personalized next-gen solutions for advisors, wealth managers, and intermediaries, to lead their TIFIN Give sales effort.
Understanding Donor Advised Funds
Hewitt started out by explaining that DAFs have been a staple in the world of philanthropy for over 60 years, but their popularity has surged in the past decade. Today, more individuals, families, and corporations are realizing the benefits of using DAFs to streamline their charitable giving while maximizing the impact of their donations.
DAFs operate like charitable savings accounts, allowing individuals, families, and organizations to make tax-deductible contributions of money and appreciated assets with the goal of making grants to charities of their choice over time. Hewitt emphasized that DAFs offer simplicity and flexibility, making them an attractive option for those looking to streamline their philanthropic efforts.
The Power of DAFs
One of the most significant advantages of DAFs is their ability to grow your charitable assets tax-free. Once your contributions are in the fund, any growth on those assets is tax-avoided. This means you can watch your charitable funds multiply over time, increasing your ability to support the causes you care about.
DAFs also allow you to separate financial planning and tax considerations from philanthropic decisions. Instead of making rushed charitable donations at year-end to offset a significant tax bill, you can fund your DAF and decide on grant recipients at your own pace. This gives you the time to think strategically about where your contributions can have the most impact.
Another unique feature of DAFs is their potential to serve as a multi-generational family platform for philanthropy. Unlike some DAF programs that limit their duration or impose restrictions, DAFs like TIFIN Give can continue for generations. Families can collaborate on grantmaking, instilling a culture of giving that lasts for years to come.
Hewitt reviewed the various ways that individuals, families, or corporations can contribute to a DAF:
- Cash: The most straightforward option is to contribute cash, which provides an immediate tax deduction. You can make a simple cash contribution or set up a recurring bank transfer for convenience.
- Appreciated Assets: DAFs also accept appreciated assets, such as stocks, bonds, real estate, or even closely-held businesses. By contributing these assets, you can avoid capital gains taxes and receive a deduction for the full value of the property.
- Complex Gifts: Recent innovations include the ability to accept complex gifts such as real estate. This option opens doors for individuals with assets they want to liquidate and use for philanthropy.
- Transfer from Another DAF or Private Foundation: If you already have a DAF or family foundation with another provider, you can transfer it with a grant to a new TIFIN Give DAF.
Naming a DAF in Estate Documents
You can designate a DAF as a beneficiary in your estate documents. However, it’s essential to establish the DAF first, with a specific account name, and then name it as a beneficiary. This ensures that your charitable intentions are honored when your estate is settled, and can enable the donor to distribute estate assets over an extended period of time versus all at once at the time of their passing.
You can invest the assets within your DAF, giving you the potential for growth. The investment strategy can be tailored to your preferences and financial goals, allowing you to maximize your philanthropic impact.
Why Choose TIFIN Give
Bill highlighted several advantages of choosing TIFIN Give for your DAF needs:
- No Minimum: TIFIN Give has no minimum requirement to open an account. This flexibility allows you to start with any contribution amount that suits your goals.
- Family Engagement: TIFIN Give offers a unique family engagement platform, enabling families to collaborate, set missions, and decide on grant recipients together.
- Grant Flexibility: TIFIN Give doesn’t impose restrictions on grant recipients, apart from IRS qualifications. This flexibility allows you to support a wide range of charitable organizations and causes.
- Low Fees: TIFIN Give offers competitive fees, allowing you to maximize the growth of your account and the impact of your contributions.
- Multi-Generational: TIFIN Give enables multi-generational giving, ensuring that your philanthropic legacy lives on.
Donor Advised Funds have evolved into powerful tools for individuals and families looking to make a lasting impact on charitable causes. TIFIN Give’s innovative platform adds an extra layer of flexibility, engagement, and convenience to your philanthropic journey.
Whether you’re an Elevate Wealth Advisory client or someone considering DAFs for the first time, we can help you unlock the full potential of your charitable giving. Get started today, and join the growing community of philanthropists making a difference with DAFs.
If you’re interested in setting up your own Donor Advised Fund or have questions about how it can benefit your financial planning and philanthropic goals, we invite you to reach out to Elevate Wealth Advisory today. Our team is here to guide you through the process, provide expert advice, and help you make a difference in the world while maximizing the benefits of your charitable contributions. Contact us now to get started on your journey towards more meaningful and impactful giving.
To watch our Webinar about Donor Advised Funds, visit our YouTube channel.