Donor Advised Funds

Donor Advised Funds May Offer Advantages

As Donor Advised Funds (DAF's) have become more popular, we've had a few people ask us about donating to the EGR Schools Foundation through a DAF. For some donors, it can be a very efficient way to help the Foundation support our students, our schools, and our community.

Donor advised funds (DAFs) are philanthropy’s fastest-growing charitable giving vehicle. There are more than 460,000 individual DAF accounts in theU.S., more than double the number just five years ago.

A DAF is a philanthropic vehicle established at a public charity, known as the DAF sponsor. Donors can establish a DAF, often with advice from or with the help of their financial advisor, accountant or estate attorney. After that, they can make charitable contributions to their DAF, receive an immediate tax benefit, and recommend grants from the DAF to qualified charities over time.

For example, if $20,000 worth of securities you plan to donate have capital gains of $10,000, selling it would entail a $2,000 capital gains tax (assuming a 20% capital gains rate) and you can deduct the rest ($18,000) as charitable contributions. If instead you donate the securities without selling it, you can deduct the current value of the securities ($20,000). This is true for all charitable contributions whether you do it through a DAF or not.

There are a few key benefits of DAFs. First, DAF sponsors are public charities, which means contributions to them receive the most favorable tax treatment under the Internal Revenue Code. Second, DAFs can be established with limited paperwork or online in a matter of minutes. Third, assets in DAFs can be invested and any growth is tax-free. Finally, most DAF sponsors allow donors to establish recurring grants. Typical intervals are monthly, quarterly and annually.

The East Grand Rapids Schools Foundation is ready and able to receive grants from DAF’s. We can make the process as simple and easy as possible for you. Just call Amy Stuursma at (616)235-3535 or email her at astuursm@egrps.org. For information about setting up a DAF, consult your financial advisor..