Donor Advised Funds

Yes, the Foundation Accepts Donations from Donor Advised Funds

Donor Advised Funds aren't just for extremely wealthy people. For many donors, it can be a very efficient way to help the Foundation support our students, our schools, and our community. As Donor Advised Funds (DAF's) have become more popular, people have asked us about donating to the EGR Schools Foundation through a DAF. 

Here's a Q&A about DAFs former EGRSF Treasurer Tom Blower put together:

Q: What is a Donor Advised Fund?

A: Think of a Donor Advised Fund (DAF) as your personal, charitable savings account. It's a special program, usually run by a financial institution or a community foundation, that is completely dedicated to giving. You put money (or stock, or other assets) into the fund whenever you like, and you get a tax deduction right away, in that same year. The money in the fund is invested and can grow tax-free. Then, whenever you're ready, you recommend a grant (a donation) from your DAF to your favorite qualified charities—like our Foundation!

Q: Can the School Foundation accept donations from a DAF?

A: Absolutely, yes! Donations from a Donor Advised Fund are one of the most common and easiest ways for us to receive support. When you recommend a grant from your DAF, the fund administrator simply sends us the donation directly. The gift is made in the DAF's name, but you'll usually have the option to let us know it came from you so we can properly thank you for your generosity. One area where DAF donations get a little complicated is when they're used to sponsor an event. You can still do it, but because of IRS regulations, you can't receive anything of value, including event tickets, in return for the donation.

Q: Why would you want to have a DAF?

A: People choose DAFs for a few great reasons. The biggest is usually tax efficiency and timing. You can make a large, tax-deductible contribution to your DAF in a high-income year, and then take your time deciding which charities to support over many years—it separates the tax decision from the giving decision. It also makes giving incredibly easy. Instead of writing a dozen checks to different nonprofits, you just log into your DAF and recommend grants with a few clicks! Plus, it gives you a simple way to involve your family in giving.

Q: Are there any disadvantages to a DAF?

A: It’s important to be aware of a couple of things. Once you put money into a DAF, that money is gone for good; you can't take it back for personal use. It must be used for charitable giving. Also, you generally cannot use DAF funds to pay for things like event tickets, auction items, or membership fees that provide a benefit back to you, as this violates IRS rules. DAF grants must be pure gifts. So you could still use a DAF to sponsor a Foundation event, but you would not be able to receive tickets for the event in return for your donation. You would have to purchase tickets to the event separately. For most people focused on long-term giving, these aren't real downsides, but they are worth knowing!

Q: How can you learn more about giving to the Foundation through a DAF?

A: We would love to talk to you about it! The best first step is to check the online portal of your DAF provider (Fidelity Charitable, Schwab Charitable, your local Community Foundation, etc.) and search for our official name, the East Grand Rapids Schools Foundation. If you can't find us, or if you have a complicated asset you want to donate (like stock or real estate), please reach out directly to Amy Turner-Thole at (616)235-3535 or aturner@egrps.org. We can provide you with all the necessary information to make the grant happen smoothly and ensure your gift has the biggest benefit to our students.