Donor Advised Fund (DAF) - Which Company to Use

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drzzzzz
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Donor Advised Fund (DAF) - Which Company to Use

Post by drzzzzz »

Hi
For those of you who have set up a donor advised fund (DAF), I have some questions about which company you might recommend (looking at Vanguard and Fidelity). What has been your experience and why would you use a DAF rather than just give money or appreciated stocks directly to a charity? Is the fee for managing the account reasonable and what are the downsides? thanks
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by mcraepat9 »

In my experience, Fidelity is the best. Low minimums, you can start with as little as $5k and give as little as $50 to a single charity. The fees are reasonable.

Giving the stock directly to the charity isn't necessarily bad, but if you are like me, I like to think about giving in terms of dollar amount (i.e. $1,000) rather than whatever 200 shares of XOM is worth. The process of doing this via a DAF is much simpler. It also allows you to frontload deductions -- once you contribute the shares to your DAF, you take the deduction in that tax year. But you can make grants to charities in future years from those funds. If you do it without a DAF, you have to wait until you actually make the donation to the charity before you can deduct it.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by dm200 »

drzzzzz wrote:Hi
For those of you who have set up a donor advised fund (DAF), I have some questions about which company you might recommend (looking at Vanguard and Fidelity). What has been your experience and why would you use a DAF rather than just give money or appreciated stocks directly to a charity? Is the fee for managing the account reasonable and what are the downsides? thanks
We chose Fidelity because the minimum to open the account was lower and the "grants" could be requested in lower amounts. It is very good. While there are fees, I believe they are reasonable.

There are several (actual or potential) benefits of using a DAF for donating appreciated stocks vs donating them to a charity (or charities):
1. Many fine organizations (especially small ones) are not well equipped to handle such direct donations
2. Organizations where you want to make small donations may not "fit" with the appreciated stocks.
3. You may wish to make a large such donation (for tax or other reasons) now, but support organization(s) for some or many years. For several reasons, many very fine organizations are not able to receive a large chink of money and use it over a period of years. [Most of the fund we donate go to one such organization.]
4. You can make an anonymous donation using a DAF.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by Random Walker »

I set up a DAF about two years ago. It's a great way to go. First of all, the date of the donation can be the date of transfer of funds from your investing account to the DAF fund rather than when money is sent to the charity. So you can optimize the timing of your donation for your own tax purposes. You make the donation whenever you want by transfer to the DAF, then when you want to give to a charity, you simply transfer the already donated money/shares to the charity. Secondly, I have found that the DAF (in my case through Schwab) provides excellent documentation of the donations for tax purposes. They can provide documentation of both the transfer to the DAF and from the DAF to the charity. They also verify that the charity is a true 501c3 organization before transferring funds.
I would strongly recommend always donating appreciated shares rather than cash from current income. In fact I would say donate the shares with the greatest appreciation. The true effective cost to you is minimized for a given size donation to the charity. If you don't donate the shares and instead liquidate for your own purposes, you would pay capital gains tax. That's money that neither you or a charity would ever see. So you do the most good and the charity experiences the most good when you donate appreciated shares. Government probably less happy. I made a sizable donation of appreciated shares and calculated that the effective cost to me was half what it would have been if I used cash.

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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by mhc »

I have all my non-work related investments at Vanguard, so I went with Vanguard Charitable. It has worked really well. I can donate from Vanguard to Vanguard Charitable electronically with just a few clicks of the mouse.

VC has been really good for me.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by jebmke »

We set up ours at VG because that is where our assets are and it is easy fund the DAF. The fees are pretty close with Fidelity and VG. The $500 minimum isn't an issue - we tend to concentrate most of our donations in larger amounts to fewer charities and we can always handle small ones out of our taxable account.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by goingup »

Random Walker wrote:First of all, the date of the donation can be the date of transfer of funds from your investing account to the DAF fund rather than when money is sent to the charity. So you can optimize the timing of your donation for your own tax purposes.
Random Walker-
So in the case of Vanguard's DAF with a $25K opening minimum, do you recognize that $25K as a single donation in one tax year?
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by Random Walker »

I think you have the option to do what you want. You can do all 25K in the year you transfer to the DAF if you want. Or you can use the date(s) money is transferred from DAF to charity. For tax purposes, you might benefit from treating it all as one big donation at the time you transferred to DAF. But pretty sure the option is yours. Just don't try to do any double counting where you take deduction on transfer to DAF and then deduct the same money on transfer from DAF to charity.

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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by dodecahedron »

I have had DAFs at Fidelity, Schwab, and Vanguard, partly for tire-kicking purposes, since I had assets to donate at all three brokerages. Fees are similar at all three places. The fees seem modest to me since they take care of recordkeeping and selling securities, something that might be a major burden on a small charity. It is especially easy to donate securities to a DAF at the same brokerage where you are currently holding your securities.

I ultimately simplified and consolidated my three DAFs into one at Schwab. (It is easy to consolidate. You just ask one DAF to make a grant of your accumulated DAF balance at that company to the other DAF.)

Vanguard has higher minimums for contributions and grants, which means it can't be used to make donations less than $500.

I really like to make almost all donations through my DAF because it simplifies recordkeeping (no digging up all those loose receipts at tax time and also the DAF maintain a permanent and well-organized record of the names and addresses of all the charities you have ever supported through them, which could be useful information to your successor advisors after your death and/or incapacity.) If and when I ever get audited on my charitable deductions, I just have to produce a few documents from my DAF about my original donations to the DAF, not a bazillion different letters and cancelled checks to many different small organizations.

Fidelity and Schwab have $50 minimums for grants, which is helpful to me. Fidelity allows grants in any multiple of $5 or $18 above that minimum. (The $18 provision is helpful if you are Jewish and/or if you are making a gift in honor or memory of a Jewish friend, because of the cultural significance of that number.) Schwab is just multiples of $5, I believe.

I am very happy with my DAF. It simplifies life greatly and gives me the ability to donate securities opportunistically (in year when my marginal tax rate is relatively high and/or I have securities with large embedded gains that I would like to prune out of my portfolio) while taking my time to think about what charities to support.
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drzzzzz
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by drzzzzz »

Thanks for all the comments, but someone mentioned something on here that I found surprising - do you not have to claim the tax donation in the year that you fund the DAF? Or are the tax deductions taken when the money is distributed? thanks
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by jebmke »

drzzzzz wrote:Thanks for all the comments, but someone mentioned something on here that I found surprising - do you not have to claim the tax donation in the year that you fund the DAF? Or are the tax deductions taken when the money is distributed? thanks
I think you misread the comments. In the year you fund the DAF, subject to the AGI minimums, you must take the deduction. If the deduction exceeds the AGI minimum for Schedule A, the excess carries over to future years. You don't get the option to choose the year you take the deduction.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by SurferLife »

We went with Vanguard and in hindsight, regret not going with Fidelity. Fidelity is a better fit for us due to the lower minimums for contributions. Now that we are back in the states and can get a medallion signature guarantee, we will be moving the account to Fidelity. That being said, customer service with Vanguard has been stellar, I really have no complaints at all, they've been great. Their website is very user friendly too, I think better than Fidelity from my recollection.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by Wagnerjb »

mcraepat9 wrote:In my experience, Fidelity is the best. Low minimums, you can start with as little as $5k and give as little as $50 to a single charity. The fees are reasonable.

Giving the stock directly to the charity isn't necessarily bad, but if you are like me, I like to think about giving in terms of dollar amount (i.e. $1,000) rather than whatever 200 shares of XOM is worth. The process of doing this via a DAF is much simpler. It also allows you to frontload deductions -- once you contribute the shares to your DAF, you take the deduction in that tax year. But you can make grants to charities in future years from those funds. If you do it without a DAF, you have to wait until you actually make the donation to the charity before you can deduct it.
I went with Fidelity and am very satisfied, for many of the same reasons that McRaePat lists. I used to donate appreciated shares directly to the charities, but the DAF is SOOOOO much easier. And, I can donate as little as $50 from the DAF to those annoying local charities to whom your spouse cannot say no.

Best wishes.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by Gill »

Random Walker wrote:I think you have the option to do what you want. You can do all 25K in the year you transfer to the DAF if you want. Or you can use the date(s) money is transferred from DAF to charity. For tax purposes, you might benefit from treating it all as one big donation at the time you transferred to DAF. But pretty sure the option is yours. Just don't try to do any double counting where you take deduction on transfer to DAF and then deduct the same money on transfer from DAF to charity.

Dave
No. The gift to charity is the date you transfer assets to the DAF. Transfers from the DAF to charity are irrelevant. You don't have any such option as stated by Random Walker.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by dm200 »

Random Walker wrote:I think you have the option to do what you want. You can do all 25K in the year you transfer to the DAF if you want. Or you can use the date(s) money is transferred from DAF to charity. For tax purposes, you might benefit from treating it all as one big donation at the time you transferred to DAF. But pretty sure the option is yours. Just don't try to do any double counting where you take deduction on transfer to DAF and then deduct the same money on transfer from DAF to charity.
Dave
No, I do not believe that is correct.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by dm200 »

The "double counting" risk is that the destination "charity" (including religious institutions) may (incorrectly) send an acknowledgement of a charitable deduction for funds you requested as a "grant".
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by goingup »

drzzzzz wrote:Thanks for all the comments, but someone mentioned something on here that I found surprising - do you not have to claim the tax donation in the year that you fund the DAF? Or are the tax deductions taken when the money is distributed? thanks
Sounds like Gill and jebmke have clarified the answer. Thanks for digging a little deeper into this topic. The timing of the tax deduction is an important point for us.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by Gill »

goingup wrote:
drzzzzz wrote:Thanks for all the comments, but someone mentioned something on here that I found surprising - do you not have to claim the tax donation in the year that you fund the DAF? Or are the tax deductions taken when the money is distributed? thanks
Sounds like Gill and jebmke have clarified the answer. Thanks for digging a little deeper into this topic. The timing of the tax deduction is an important point for us.
The DAF is a charity. When you give to the DAF you have made a gift to charity at that point. Transfers from the DAF to qualified charities have no impact on you personally. It is quite common for charities to acknowledge grants from your DAF but you are not permitted to take a deduction for those grants.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by Artsdoctor »

Random Walker wrote:I think you have the option to do what you want. You can do all 25K in the year you transfer to the DAF if you want. Or you can use the date(s) money is transferred from DAF to charity. For tax purposes, you might benefit from treating it all as one big donation at the time you transferred to DAF. But pretty sure the option is yours. Just don't try to do any double counting where you take deduction on transfer to DAF and then deduct the same money on transfer from DAF to charity.

Dave
Definitely not. When you donate your shares to your DAF, you take the donation on that date. You cannot spread it out.

Essentially, when you donate your shares, you no longer have them. The donation to the DAF has gone through. You then become the "advisor." When you want to make a donation, you "advise" your DAF what you'd like to do. And sometimes they will turn you down:

Two donation practices you'll want to keep in mind. (1) You are not permitted to make recurring commitment donations through your DAF; say you pledge to donate $25,000 to your alma mater over 5 years at $5,000 per year--this is not permitted. However, it is easy to get your alma mater to write a letter releasing you of your "legal" pledge and that letter then allows your DAF to process the donation. (2) You are not permitted to make a charitable donation to your favorite charity if you get something in return. For example, you want to donate $500 to your radio station and you get a couple of CDs as a gift; your charitable contribution is actually not $500 but $450. This sort of thing is not allowed through a DAF.

I have mine through Fidelity for all of the reasons noted above. The minimums are smaller and the donations can be as low as $50. There is no problem with transferring over appreciated Vanguard shares to the Fidelity DAF.

Finally, it's perfectly acceptable to transfer your shares directly from your account to the charity. But the problem really is that not all charities have Vanguard or Fidelity accounts so your flexibility could be compromised.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by PhysicianOnFIRE »

+1 to Fidelity Charitable.

I opened a DAF with T. Rowe Price several years ago because that's where I had my money.

A couple years later, I transferred it all to Vanguard Charitable because that's where I now had my money. I left a portion of it behind at T. Rowe Price for their lower minimum grant. I'm not a big enough benefactor to give a minimum of $500 to every charity I want to support.

When I spent more time researching the available options, I found that Fidelity Charitable offered the best of both worlds. I emptied the T. Rowe Price DAF by donating it to fund a new account with Fidelity. I now have money at both Vanguard Charitable and Fidelity Charitable.

You're smart to do your homework first. If I were to start one now, I'd go with Fidelity only.

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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by LeeMKE »

I opened a DAF at Fidelity and today attended a workshop about Charitable Giving and their DAF.

I was most impressed with the ability to see any of three different databases about the charities you are considering, to see how responsible they are with your donation.

One of the workshop attendees mentioned that it was easy to access on a mobile device, so when out at a fundraiser, or by a knock on the door, you can know immediately if this is a legitimate charity or not.

I also liked the way it is organized, so you can make repeat contributions in a variety of ways, string donations out over various time periods, and do it all quickly from any computer or mobile device.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by dm200 »

Two donation practices you'll want to keep in mind. (1) You are not permitted to make recurring commitment donations through your DAF; say you pledge to donate $25,000 to your alma mater over 5 years at $5,000 per year--this is not permitted. However, it is easy to get your alma mater to write a letter releasing you of your "legal" pledge and that letter then allows your DAF to process the donation. (2) You are not permitted to make a charitable donation to your favorite charity if you get something in return. For example, you want to donate $500 to your radio station and you get a couple of CDs as a gift; your charitable contribution is actually not $500 but $450. This sort of thing is not allowed through a DAF
.

I believe it is acceptable to make such recurring donations, such as to a building fund, as long as your "pledge" is not legally binding. The ones I have done and am familiar with are not legally binding. Since we have been with Fidelity, I believe that issue has been minimized (and clarified). I also agree with the "letter" of #2, but there may be certain "perks" of being a donor that you could accept, such as, perhaps, being invited to a donors dinner or reception.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by FIREchief »

One more vote for Fidelity (and using a DAF in general). If you have your after tax investments with Fidelity, donating specific lots of appreciated shares is very simple and straightforward. At tax time, it is very convenient to have only one (or a small number) of donations to a single charity (the DAF). Also, it is highly unlikely that the IRS would ever question the legitimacy of Fidelity Charitable as a 501c3.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by Artsdoctor »

"I believe it is acceptable to make such recurring donations, such as to a building fund, as long as your "pledge" is not legally binding. The ones I have done and am familiar with are not legally binding. Since we have been with Fidelity, I believe that issue has been minimized (and clarified). I also agree with the "letter" of #2, but there may be certain "perks" of being a donor that you could accept, such as, perhaps, being invited to a donors dinner or reception."

Yes. The multi-pledge is easy to work around although I have had to have that letter for Fidelity and they definitely called the Director of Giving to verify.

At this point, charities know exactly how much of a contribution is a tax-deductible amount and can tell you. You can definitely be invited to dinners, etc., but when you're looking at the information on which level to support (radio station, museum, etc.), for example, it's now pretty commonplace for the charity to specify "$1,000 contribution of which $875 is tax-deductible." It's these things that you have to look out for, and invariably you're going to have to write a check and not use your DAF for some of these things. For example, we are members of a local art museum and our membership level allows us free admissions to multiple reciprocal museums throughout the country. However, this means that not all of the annual contribution is tax-deductible--and therefore we cannot use our DAF.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by drzzzzz »

After you start giving to a donor advised fund, are you required to distribute a certain percentage or dollar amount per year? What happens to the fund when you die?
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by TheAncientOne »

drzzzz, you're not required to distribute a certain percentage although the fund as a whole does and they do have the right to make account holders make donations in order to meet this. Since the minimum is 5% and the typical fund (Fidelity is what I'm familiar with) donates 15-20% per year, this will be most unlikely.

As for what happens if you die, they do ask you to list someone(s) who will control the account in case of that. If you don't they have a default charity that receives it. In the case of Fidelity, I seem to recall it was the American Red Cross.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by dm200 »

TheAncientOne wrote: Wed Feb 28, 2018 10:44 am drzzzz, you're not required to distribute a certain percentage although the fund as a whole does and they do have the right to make account holders make donations in order to meet this. Since the minimum is 5% and the typical fund (Fidelity is what I'm familiar with) donates 15-20% per year, this will be most unlikely.
As for what happens if you die, they do ask you to list someone(s) who will control the account in case of that. If you don't they have a default charity that receives it. In the case of Fidelity, I seem to recall it was the American Red Cross.
I believe, depending on the DAF, you MAY be required to make certain "grants".
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by Artsdoctor »

drzzzzz wrote: Wed Feb 28, 2018 10:34 am After you start giving to a donor advised fund, are you required to distribute a certain percentage or dollar amount per year? What happens to the fund when you die?
Actually, at Fidelity, you are required to make grant recommendations, although the time frame is very generous. You must make a recommendation every three years at least and if you don't, they will start a process of getting you to make some sort of a grant. Ultimately, if you don't, they'll make it for you. You can read the details here:

https://www.fidelitycharitable.org/docs ... elines.pdf

Presumably, if you're going to make a contribution to your DAF, you're going to use it, so I wouldn't anticipate that this is a common issue.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by drzzzzz »

Artsdoctor wrote: Wed Feb 28, 2018 8:27 pm
drzzzzz wrote: Wed Feb 28, 2018 10:34 am After you start giving to a donor advised fund, are you required to distribute a certain percentage or dollar amount per year? What happens to the fund when you die?
Actually, at Fidelity, you are required to make grant recommendations, although the time frame is very generous. You must make a recommendation every three years at least and if you don't, they will start a process of getting you to make some sort of a grant. Ultimately, if you don't, they'll make it for you. You can read the details here:

https://www.fidelitycharitable.org/docs ... elines.pdf

Presumably, if you're going to make a contribution to your DAF, you're going to use it, so I wouldn't anticipate that this is a common issue.
Thanks for the info and PDF. I am curious which fund or strategy objective do most individuals use for their DAF since I hadn't really thought about whether I should try to maintain the account balance, grow it, or maximize it? Not really sure I even want to spend much time deciding that question once the money or mutual funds have left my accounts and are then in the Donor Advised Fund.
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Re: Donor Advised Fund (DAF) - Which Company to Use

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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by jbranx »

drzzzzz wrote: Wed Feb 28, 2018 9:25 pm
Artsdoctor wrote: Wed Feb 28, 2018 8:27 pm
drzzzzz wrote: Wed Feb 28, 2018 10:34 am After you start giving to a donor advised fund, are you required to distribute a certain percentage or dollar amount per year? What happens to the fund when you die?
Actually, at Fidelity, you are required to make grant recommendations, although the time frame is very generous. You must make a recommendation every three years at least and if you don't, they will start a process of getting you to make some sort of a grant. Ultimately, if you don't, they'll make it for you. You can read the details here:

https://www.fidelitycharitable.org/docs ... elines.pdf

Presumably, if you're going to make a contribution to your DAF, you're going to use it, so I wouldn't anticipate that this is a common issue.
Thanks for the info and PDF. I am curious which fund or strategy objective do most individuals use for their DAF since I hadn't really thought about whether I should try to maintain the account balance, grow it, or maximize it? Not really sure I even want to spend much time deciding that question once the money or mutual funds have left my accounts and are then in the Donor Advised Fund.
I opened our DAF with Fidelity when it became available and have really appreciated how they have continued to make good options available for investment choices. At times I have been as much as 100% stocks and am presently in three funds: Balanced, US, and International. During the bull years it's been very nice to recommend a donation and see months later that the balance has actually reached a new high with the market. Not so much in down years, of course, which is why I am more conservatively investing now. DW and I are now doing charitable RMD's directly to charities--RMDs cannot be given to a DAF under congressional rules--so I am investing more conservatively in the DAF to preserve assets.

Fidelity simply has great options from all the major index asset classes to pooled investments. Easy to be a Three-Fund investor in low-cost funds. It's simply been a flawless process for us since we have most of our invested assets there.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by Iorek »

I don't have experience with the others but I went with Schwab because that's where the securities we wanted to donate were held and we've been happy.

It's very nice to think "I'd like to give some loney money to this group" and then I can open up the Schwab app, type in the charity and amount (and say if I want to be anonymous or not) and they'll take care of it. I am usually giving less than $500 so I am glad their minimum is lower.

I put my money in a socially conscious balanced fund. (Please don't lecture me whether that's appropriate-- in this context for us it has been)
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by Artsdoctor »

DrZZZZ,

You're going to find a lot of different ways that people use their DAFs. I can tell what has worked for me, many have other methods, and probably even more will be changing the way they use DAFs with the new tax law (and the increased standard deduction).

I have both Vanguard and Fidelity DAFs and I've had the Fidelity DAF for many years. I use my asset allocation to decide when I contribute appreciated shares. During lengthy bull markets, such as what we've had, I donate the most appreciated shares as a form of rebalancing. At this point, I have several years of anticipated charitable contributions in my DAFs; I'm going to guess that I am not going to contribute anything this year to the DAFs because of the change in tax law, but that I will probably "batch" contributions.

Once the contributions are made to the DAFs, I then view the DAFs as a sort of foundation which is autonomous of my portfolio. I invest a portion of the DAFs in consevative vehicles but I also have money invested in aggressive vehicles. I rebalance when things gets out of whack. If the DAFs do particularly well, I will recommend grants to more organizations and/or higher amount. If it's a lean year, then I recommend fewer grants. I have several organizations to which I've committed annual giving (within the confines of DAF rules). I'm not bothered by the fees; after all, they don't come out of my pocket, they come out of the DAF's pocket. Although everyone likes low fees, the DAF fees are manageable and I've found that using my methods described above have resulted in far more contributions than what I was doing prior to my "method," so basically everyone benefits.
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dm200
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by dm200 »

Currently, we use our Fidelity DAF to fund our regular charitable donations. Our general goal is to keep the same balance in the DAF over time and mostly fund the donations from the gains - although there are a few that we make every year - even if the balance goes down.

We try to currently maintain:

9% International equity
29% Fixed Income
59% Equity
3% Money Market
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drzzzzz
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by drzzzzz »

Thanks for all the replies, I am entering a period for a few years where I want to do some roth conversions prior to RMD and social security. If I am not mistaken, the DAF allows me the opportunity to increase my contributions to the DAF which then should increase the space available for me to do Roth conversions while not being forced to give all the charitable donations in the same year. Has anyone donated appreciated Vanguard mutual funds to their DAF at Fidelity and is that problematic?
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by Pigeye Brewster »

drzzzzz wrote: Thu Mar 01, 2018 4:33 pm Has anyone donated appreciated Vanguard mutual funds to their DAF at Fidelity and is that problematic?
I set up a Fidelity DAF last year using Vanguard funds and was pleasantly surprised at how smoothly it went. Two donations, in fact. One to set it up and then a later one before the end of the year. No problems at all.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by Artsdoctor »

drzzzzz wrote: Thu Mar 01, 2018 4:33 pm Thanks for all the replies, I am entering a period for a few years where I want to do some roth conversions prior to RMD and social security. If I am not mistaken, the DAF allows me the opportunity to increase my contributions to the DAF which then should increase the space available for me to do Roth conversions while not being forced to give all the charitable donations in the same year. Has anyone donated appreciated Vanguard mutual funds to their DAF at Fidelity and is that problematic?
There are two ways to contribute to your Fidelity DAF from Vanguard. You can either donate appreciated Vanguard shares directly to the Fidelity DAF, or you can transfer funds from your Vanguard DAF to your Fidelity DAF at any time directly. For me, I had a lot of complicated lots at Vanguard which I wanted to strategically donate; I have had a few unrelated experiences in the past with specific lots being mixed up so staying within Vanguard seemed like a easier approach with less chance for error. Indeed, I've never had a problem with any contributions to my Vanguard DAF. Once, I needed to transfer funds from my Vanguard DAF to my Fidelity DAF and it could not have been simpler.

In reality, I think that Fidelity's DAF is superior to Vanguard's. You can do a few more things with Fidelity that Vanguard doesn't offer. At Fidelity, you can recommend a grant in someone's honor or memory, designate that you want that person to be notified, and it will be taken care of. At Vanguard, they cannot do that, and I've discussed with them on a few occasions (they say they're working on it). You can also be much more specific at Fidelity when it comes to notifying, or working with, a specific employee or group of employees at the charity of your choice; this can be helpful when you're dealing with complex giving programs.
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Re: Donor Advised Fund (DAF) - Which Company to Use

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Random Walker wrote: Wed Oct 19, 2016 10:17 am I think you have the option to do what you want. You can do all 25K in the year you transfer to the DAF if you want. Or you can use the date(s) money is transferred from DAF to charity. For tax purposes, you might benefit from treating it all as one big donation at the time you transferred to DAF. But pretty sure the option is yours. Just don't try to do any double counting where you take deduction on transfer to DAF and then deduct the same money on transfer from DAF to charity.

Dave
The donation is made when the money is transferred to the Donor Advised Fund (DAF), and not when the grant is made to the particular charity.
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Re: Donor Advised Fund (DAF) - Which Company to Use

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littlebird wrote: Fri Mar 02, 2018 9:55 am
Random Walker wrote: Wed Oct 19, 2016 10:17 am I think you have the option to do what you want. You can do all 25K in the year you transfer to the DAF if you want. Or you can use the date(s) money is transferred from DAF to charity. For tax purposes, you might benefit from treating it all as one big donation at the time you transferred to DAF. But pretty sure the option is yours. Just don't try to do any double counting where you take deduction on transfer to DAF and then deduct the same money on transfer from DAF to charity.
Dave
The donation is made when the money is transferred to the Donor Advised Fund (DAF), and not when the grant is made to the particular charity.
Yes - this is correct. You have no choice.

As I posted earlier, we love our Fidelity DAF :)

If you make small or modest donations to many causes, that gets you on all sorts of annoying mailing lists, phone lists, email, etc. With a DAF, you can request "grants" to such entities anonymously. You get the tax deduction (when you fund the DAF) and the desired entities get the money and they cannot put you on these annoying lists. Win - win...
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by littlebird »

dm200 wrote: Fri Mar 02, 2018 10:00 am
littlebird wrote: Fri Mar 02, 2018 9:55 am The donation is made when the money is transferred to the Donor Advised Fund (DAF), and not when the grant is made to the particular charity.
Yes - this is correct. You have no choice.

As I posted earlier, we love our Fidelity DAF :)

If you make small or modest donations to many causes, that gets you on all sorts of annoying mailing lists, phone lists, email, etc. With a DAF, you can request "grants" to such entities anonymously. You get the tax deduction (when you fund the DAF) and the desired entities get the money and they cannot put you on these annoying lists. Win - win...
That's one of the reasons why I love our DAF. I originally had it at Vanguard, where the funds I transferred into it were being kept, but when I found out Fidelity's grant minimums were only 10% of Vanguard's, I made a grant of the entire Vanguard DAF to Fidelity's DAF.
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Re: Donor Advised Fund (DAF) - Which Company to Use

Post by dm200 »

We also use our Fidelity DAF to make memorial donations where the family of the deceased suggests donations to this or that charity "in lieu of flowers" - very easy and convenient. My wife and I attended the wedding of a longtime friend recently - and they requested/suggested a donation to one of several charities instead of wedding gifts - worked great with the DAF. :)
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Re: Donor Advised Fund (DAF) - Which Company to Use

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dm200 wrote: Fri Mar 02, 2018 10:26 am We also use our Fidelity DAF to make memorial donations where the family of the deceased suggests donations to this or that charity "in lieu of flowers" - very easy and convenient. My wife and I attended the wedding of a longtime friend recently - and they requested/suggested a donation to one of several charities instead of wedding gifts - worked great with the DAF. :)
Exactly. We do this same. And this is where Vanguard's DAF fails miserably.
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