These days, many of us want more control over how, when, and where to direct our charitable giving. There are many ways to make charitable gifts, but one increasingly popular vehicle is a “Donor Advised Fund” or ‘DAF’. Although it’s a charitable giving tool that has been around since the 1930s (and not formally governmentally recognized until 2006), DAFs have become increasingly popular for those looking for more control or anonymity. Without the complications of a family foundation, or the time entailed in writing checks for your contributions, a DAF can make it easy for you to consolidate your giving while eliminating the burden of paperwork, administration, and even comes with immediate tax advantages.
There are many entities through which you can set up a DAF, including Schwab, Fidelity, and even your local community foundation, but for our purposes, we’ll look at DAFs through, the Episcopal church Foundation, (a 501 (c)(3) nonprofit separate from The Episcopal Church). Since its founding in 1949, the ECF has helped build, vitalize and transform Episcopal faith communities focusing on formation, finance and resources, and has only recently added DAFs to its huge array of giving vehicles to the Episcopal community.
Through the ECF, you can establish a DAF in as little as a day and avoid the cost of multiple transfers of assets by making a minimum irrevocable gift of $2,500, thereby taking advantage of an immediate tax deduction at the maximum amount allowed by law. Simply name your DAF, advisors, and successors or ultimate charitable beneficiaries, and ECF places your contribution in a donor-advised fund account so it can be invested and grow tax-free.
You recommend the amount of each grant—as small as $100 each—to qualified grant recipients of one or more organizations, including your parish, diocese or The Episcopal Church, as well as other local ministries or secular charities that are close to your heart. Not only do they provide round-the-clock access to a dedicated online portal, you have the flexibility to request distributions to specific charities at any time and even schedule recurring grants, all at your convenience. For those looking for more privacy around their charitable giving, any or all grants can be made anonymously. There are a few limitations though; grants may not be made to fulfill pledges, parish pledges, membership commitments or in exchange for any benefits to the donor. Also, ECF requires that a majority of the grants be made to Episcopal entities, however, their knowledgeable staff can assist in selecting charities that fit your giving priorities and meet your goals. You also may select from among numerous investment choices—including socially responsible options— depending on your personal short- and long-term goals for making grants, and investment/administrative fees are kept to a minimum to enhance your philanthropy.
The Episcopal Church cannot recommend a particular DAF. As with everything, be sure to do your research, ask lots of questions and speak with your financial planner.
To learn more about supporting the work of The Episcopal Church through any Donor Advised Fund or other giving vehicles, contact T.J. Houlihan at (212) 716-6271 or giftplanning@episcopalchurch.org. This information is intended to provide general gift planning information. The Office of Development is not qualified to provide specific legal, tax or investment advice, and should not be looked to or relied upon as a source for such advice. As always, consult with your own legal and financial advisor before making any gifts.