A donor-advised fund (DAF) is a flexible, tax-savvy way to set aside funds to support the charities and organizations you care about most, like Indiana University. Importantly, they also allow the donor to retain advisory privileges over charitable donations.
A DAF is a contractual relationship between a donor, like you, and a sponsoring organization, such as Fidelity, Schwab, or independent charitable foundations. After designating a charitable contribution, the sponsoring organization owns the assets and administers the fund.
DAFs offer remarkable versatility in letting you choose how and when to give. This unique “hands on” philanthropy is a satisfying giving option that also provides freedom from the administrative responsibilities of managing the account, including investment decisions.
Some of the potential advantages of DAFs:
- Greater tax deductions as a percentage of adjusted gross income (currently 60% AGI vs. 30% for a private foundation).
- Advisory privileges over charitable donations that are distributed from the account.
- No start-up costs, unlike private foundations.
- Lower annual administrative fees than private foundations.
- Not subject to annual grant distribution requirements.
- Greater protection for donors who wish to make anonymous gifts.
- Timing flexibility.
At their core, DAFs are a simple and flexible giving option that offer a wealth of advantages for the donor. You may even wish to name IU Foundation as a DAF beneficiary. Please contact us with questions at any time. It would be our pleasure to discuss the potential benefits of DAFs with you and explore the possibilities associated with this flexible giving strategy.