DONOR ADVISED FUNDS
A Donor Advised Fund is a fund that a donor establishes and allows for an individual or family to contribute to and control a
long-term, hands-on philanthropic endowment.
This cost effective approach, combined with the access to excellent investment advisory services, are compelling reasons to create a DAF with the CFSWIA. They are as easy as 1, 2, 3!
DAFs are a great alternative to creating a family, private foundation because it enables a donor to achieve estate planning objectives without the administration, legal, and tax costs of creating a private foundation.
When setting up a DAF, a donor is setting up an efficient, centralized, and online-accessible route to managing charitable giving. A minimum of $5,000 in cash, securities, real estate, shares of a closely-held business, or other appreciated assets can open a DAF.
While in the bank, the investment will continually grow. Many donors actively use a DAF during their lifetime while building resources, which grow
tax-free, to create a permanent “legacy” endowment after they pass away, ensuring that your values will continue to live beyond your lifetime.
The donor then recommends grants from the fund at any time. Grants can be made to any 501(c)(3) nonprofit, provided their mission does not conflict with Catholic teachings and values. It is even possible to make anonymous gifts to charities.
A DAF can easily be established with a simple agreement. Our annual fee for administration and investment services is approximately 1%.
CFSWIA offers quarterly consulting upon donor request. Our assistance offers a donor’s passion to be linked with needs found in the parishes, schools, and Catholic organizations within the diocese.
An online portal allows for hassle-free contributions and grant recommendations at the donor’s convenience and simplifies record keeping.
Dollars are invested in accordance with the U.S. Conference of Catholic Bishops’ (USCCB) Catholic values investing principles. Investments are screened and monitored on a quarterly basis.
Donors have three investing options in terms of risk: strategic, moderate, and capital preservation. A donor may choose to invest in any combination of the three portfolios to diversify as they desire.
During the lifetime of the donor(s), a DAF offers a centralized way for parents to involve children in philanthropy. Donors can invite children to participate in discussions about grant recommendations from the fund. Some even consider allowing each child to recommend a certain amount of giving on an annual basis. In this way, future generations share the joy of being philanthropic, as well as witness first-hand the parent’s commitment to helping those in need.
A DAF can be the first step in establishing a family tradition of philanthropy that can be carried on from one generation to the next.
A DAF can be especially useful when your financial circumstances might benefit from a significant charitable tax deduction in a single year, while you might wish to distribute or grant your gifts over several years. This is referred to “bunching” or “bundling” gifts.
If the donor contributes cash to a DAF, the income tax deduction is limited to 60% of the donor’s adjusted gross income (AGI). If long-term appreciated assets, such as stocks, bonds, or real estate, are contributed to the DAF, the donor has an opportunity to further leverage the deduction. By donating these types of assets the donor generally will avoid capital gains tax. The charitable income tax deduction is based on the fair market value of the property and is limited to 30% of the