Donor Advised Funds (DAFs) are investment accounts that allow you to make designated donations from your invested assets to your favorite nonprofits, like WomenVenture. In recent years, they have become an increasingly popular method of donating because of their adaptability and efficiency. DAFs accept a wide range of assets, and they allow the donor to contribute immediately, streamlining the donation process. Below are some of the many ways that DAFs benefit the donor and the nonprofit.
Tax Benefits
- Immediate Tax Deduction – Contributions to a DAF are eligible for an immediate tax deduction, allowing you to reduce your taxable income in the same year that your donation is made.
- Reducing/Eliminating Capital Gains – You can receive an immediate tax deduction on your Adjusted Gross Income (AGI) for gifts of appreciated securities, mutual funds, real estate, and other assets. Also, securities that have been held for more than one year can be donated at their fair market value and are not subject to capital gains tax.
Strategic Giving
- Timing Flexibility – If you plan to allocate funds before the year’s end but are not ready to commit right away, using a DAF will give you time to develop a considered giving strategy, allowing you to donate to WomenVenture in individual payments or installments over time.
- Centralized Giving – DAFs let you centralize and simplify your charitable giving, managing all your donations from one convenient account.
Personal Approach
- Privacy – If you do not want to be identified publicly, you can choose to give anonymously and choose how much of your personal information is shared with WomenVenture.
- Support and Resources – Many DAF providers offer advisory services to help you develop effective giving strategies.
Next Steps….
To learn more about Donor Advised Funds, begin by reaching out to a sponsoring organization like Fidelity Charitable, Schwab Charitable, The Minneapolis Foundation, or The Women’s Foundation of Minnesota.
