Donor-advised funds have become popular in part because of their versatility, allowing donors to give what, how, when and where is most favourable for them.
We find charitable solutions for donors that make giving with DAFs as seamless and advantageous as possible. DAFs also offer several tax benefits, and they can be linked as a complementary vehicle to other financial and estate planning tools. Some common uses for DAFs are:
Donate Now. Grant Later.
A DAF allows time for a donor to develop a philanthropic vision. Donors can make contributions to their fund, receive an immediate tax benefit and make grants to their favourite charities over time. Some donors make grants immediately after starting a DAF, while others take time to tailor a charitable giving strategy.
Create Multi-Year Commitments to Your Favourite Charities.
Donors can use their DAFs to support their favourite charities—once, or for years to come. DAFs allow donors to use specialised grant agreements, recurring grants and anonymous grants to help reach their charitable giving goals.
Control Your Recognition—Or Remain Anonymous.
Sometimes donors wish to give without attracting attention. A donor-advised fund allows you to make grants with total anonymity, as grants are not made public and are not required to be reported on any annual reports. You may decide on a grant-by-grant basis if you wish to be identified and how; you can even use your DAF to secure naming rights to buildings and programmes.
Convert Illiquid Assets into Philanthropic Capital.
DAF sponsors accept a wide variety of assets as contributions, including illiquid assets. These can include property, works of art, collections, and other tangible personal property. In recent years, donating illiquid assets to DAFs has become a more popular trend. Donors are looking beyond their share portfolios to view their total wealth as potential gifts to charity.
Build a Giving Legacy.
Many donors find it important to involve their family in giving, and to encourage charitable giving in the next generation. DAFs offer donors the opportunity to establish their loved ones as secondary advisors and successors who gain full responsibility for the account—including management and grant recommendation—when the primary donor can no longer manage the account. Donors can also leave bequests to their DAFs with instructions to grant out either the balance or a percentage of the assets over time, ensuring a charitable legacy that lasts beyond their lifetime.
Give Across the Globe.
Donors can use their DAFs to make grants to international charities and NGOs while still receiving a tax benefit. Some DAF sponsors, like NPT UK, are uniquely qualified to assess the charitable eligibility of international grants, allowing global grantmaking to be a more integral part of a donor’s giving strategy.
Please Note: The information provided here is general and educational in nature. It is not intended to be, nor should it be construed as, legal or tax advice. NPT UK does not provide legal or tax advice. NPT UK strongly encourages you to consult with your tax and legal advisors before making charitable contributions.
