What is a Donor Advised Fund (DAF)? Donor Advised Funds (DAF) are a means for individuals to make philanthropic gifts that allow donors to combine tax benefits with the flexibility to easily support your favorite charities. It is a personal charitable “savings account” established by a donor (this could be with a Community Foundation) with the sole purpose of supporting charities like New England Village.
DAFs are an excellent way to both simplify your charitable giving and facilitate your strategic philanthropic goals. DAFs allow donors to give cash, stock and other assets where the donor receives an immediate tax deduction when the contribution is made and the donor then can “grant” specified amounts to the charities of their choice. Funds can also be set up to pass to succeeding generations.
Simplicity – The DAF sponsor (Community Foundation or another Charitable Sponsor) handles all record-keeping, disbursement, and tax receipts.
Flexibility – Timing of your tax deduction can be separate from your charitable decision making.
Tax- efficiency – Contributions are tax-deductible and any investment growth in the DAF is tax-free. It is also easy to donate long-term appreciated securities, eliminating capital gains taxes and allowing you to support multiple charities from on block of stock.