DONOR ADVISED FUNDS

A Donor Advised Fund (DAF) is a fund that an individual or family can create to allow for long term, hands-on, philanthropic giving. Contributions to a DAF are charitable in nature, they can be done as often as you wish. You and your family, if you wish, can then “advise” how the funds are used during your lifetime and lifetime of others, as you determine.

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. It not only enables a donor to achieve estate planning objectives without the administration, legal, and tax costs of creating a private foundation, but it is actually creates a more “private” way of administering your philanthropy.

1

GIVE

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.

2

GROW

While invested in a portfolio you choose, 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 philanthropic values will continue to live beyond your lifetime.

3

GRANT

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.

BENEFITS

Catholic Foundation of Southwest Iowa

A DAF can easily be established with a simple agreement.

Catholic Foundation of Southwest Iowa offers quarterly consulting upon donor request. Our assistance offers a donor’s passion to be linked with needs found in the parishes, schools, and other not for profit organizations within the diocese, as long as that not for profit mission falls in line with Catholic values..

An online portal allows for hassle-free contributions and grant recommendations at the donor’s convenience and simplifies record keeping.

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Investing

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.

Long-Term

During the lifetime of the donor(s), a DAF offers a centralized way for parents to involve other family members in your philanthropy. Donors can invite family members to participate in discussions about grant recommendations from the fund. Some even consider allowing each family member 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 donor’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.

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Tax

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
individual’s AGI.

To set up a Donor Advised Fund, contact Brooke Pulliam.