Donor Advised Funds
A donor-advised fund, or DAF, is a charitable fund that lets you make a donation now, get tax acknowledgment for the full amount of the donation in this calendar year, then make grants to charitable organizations out of the fund now or at a later time.
Contact Traci Hiatt at traci@yvcf.org or (970) 879-8632 for more information.
“While there are other ways to support worthy causes in the Valley and elsewhere, we decided to create a Donor Advised Fund because it allows certain tax and timing advantages that are not available in making direct gifts. Working with the Community Foundation, our Donor Advised Fund has been easy to administer, especially compared to the burdensome administrative headaches described by our friends who have family foundations.”
– Jim and Barbara Bronner
“Donor Advised Funds are a planning tool that offer some great advantages for a growing number of my clients, especially those who want to donate now, but are not yet decided on the charity or charities they want to give to. They are also useful for clients that have stock or other non-cash assets to donate. Many of my clients are talking with their tax advisors about how the new tax laws might change their strategy for charitable giving and how a Donor Advised Fund can benefit their planning.”
– Deb Conroy, Estate Planning Attorney with Keller Law and YVCF Board of Trustees member
11 reasons to establish a Donor Advised Fund:
1. By creating a Donor Advised Fund (DAF), a donor receives benefits similar to those of a private foundation but without the costs, administrative responsibilities and government reporting requirements.
2. Gifts to DAFs are tax-deductible to the extent allowed by the law. Donors can simplify their charitable deduction reporting for the IRS by only having one receipt.
3. Donors can contribute gifts of securities, real estate or other complex assets. If those assets have appreciated in value, donors may not be subject to capital gains tax on the appreciated value.
4. Donors can choose the tax years in which they make donations to their fund, allowing them to control the year of tax deductibility. In difficult economic times, a donor can use accumulated assets within a DAF to accomplish desired charitable giving without relying on other assets.
5. During the year, YVCF staff are available to meet with DAF advisors to help connect their charitable desires with local community needs. YVCF can educate DAF advisors regarding the needs of the local community by providing a synopsis of grant requests submitted by local charities.
6. Distributions made from DAFs may support qualified charities anywhere in the United States, not just local charities. There are no minimum distributions required and donors have the ability to remain anonymous. Donors can continue to support the charities they have in the past.
7. YVCF provides a choice of investment pools that a donor can select. Assets within DAFs are professionally managed and any growth in the fund is tax-free and increases the dollars available for distributions.
8. DAFs are charged a low Professional Services Fee that supports the operations of the Yampa Valley Community Foundation.
9. Individuals with private or family foundations can benefit from establishing a DAF that can enrich and complement their philanthropic efforts.
What DAFs cannot do:
Donor Advised Funds have limitations and cannot support sponsorships, pledges or other cases where the donor would receive a benefit.
Donor Advised Funds legally belong to YVCF, and while donors make recommendations, the YVCF Board has the final vote on all distributions (variance power).