Philanthropy is deeply personal and should support the causes that matter most to you. One tool I recommend for those looking to maximize their impact in a way that feels meaningful and intentional is a donor-advised fund or DAF.
Advantages of Incorporating a Donor Advised Fund
One of the most significant advantages a DAF offers is flexibility. Maybe you've had a financial windfall this year and want to set aside funds for giving, but you're not sure which organizations to support yet. A DAF lets you take that first step—contributing now while giving you time to be strategic about your philanthropy.
DAFs can be a powerful tool for making a lasting impact. The options open to donor-advised funds allow you to be deliberate, research organizations, understand the impact, and make grants when it feels right.
Incorporating a DAF in your giving plan can also provide tax benefits. For example, if you have highly appreciated assets or prefer flexible, long-term giving, a DAF could be a smart choice. I'd recommend you speak to your tax professional, but benefits might include immediate tax deductions, minimized capital gains, tax-free investment growth, and other diversified tax and estate planning options.
I encourage donors to think of their DAF as more than just a financial tool—it's a way to stay engaged. You can track your giving over time and adjust your focus as new needs arise. Many donors also use their DAFs as a way to instill a sense of philanthropy in the next generation, which creates years of giving that lasts beyond your lifetime.
Finding the Right Approach for You
A donor-advised fund is just one way to enhance your philanthropic approach and move beyond reactive giving. Whether you choose a DAF or another giving vehicle, being intentional ensures that your generosity will lead to meaningful change in the causes you care about most.
Thank you to Joe Tumolo for inviting me back to his Cup of Joe Podcast for another interesting conversation about philanthropy. Here's how you can listen to our discussion and learn more about Donor Advised Funds as a giving option.
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