Should I Use A Donor Advised Fund (DAF) When Giving To Public Charities?

Donor advised funds (DAFs) have become a popular and valuable planning vehicle for charitable giving. A DAF is a type of charitable account that allows you to make a charitable contribution, receive an immediate tax deduction, and then recommend grants from the fund to your favorite charities over time.

When considering a DAF, there are several key factors to consider. First, you’ll want to clarify your charitable goals and identify the causes and organizations you wish to support. This can help you determine the funding strategy that works best for you, such as making a one-time contribution, regularly scheduled contributions, or donations of appreciated assets.

DAFs also offer tax advantages that can help you optimize your giving strategy. You can take an immediate tax deduction for contributions to the fund and then recommend grants to your chosen charities over time. This can help you minimize your tax liability while still supporting the causes that matter to you.

In addition to DAFs, there are other charitable giving strategies to consider, such as direct donations, charitable remainder trusts, and charitable lead trusts. We can discuss these options and help you determine which strategy best meets your needs.

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Robert J. Pyle, CFP®, CFA, AEP® founded Diversified Asset Management, Inc., in 1996 to provide personalized, comprehensive wealth management services to successful individuals, families, single women, and business owners. His specialty is addressing the complex financial needs of self-employed professionals, corporate executives, and small-business owners. Our disclosure can be found here. The views, opinion, information, and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc. Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting, or tax advice.