Donor Advised Fund (DAF) Newbie Questions

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Carbonate24
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Donor Advised Fund (DAF) Newbie Questions

Post by Carbonate24 »

A relative passed away recently and named me as successor account advisor (...or, whatever the proper term is...) for their Donor Advised Fund. The person had discussed this with me before they passed, and they shared the reasons they set it up, intent, and that they trusted me to continue making distributions as I see fit. Their Traditional IRA also named this DAF as the sole beneficiary....so the assets are considerable (from my perspective). I need to dive into the specifics and get up to speed.....but I also want to make series to charitable gifts in the near future to honor my relative. With that in mind, I'd appreciate input on a few quick questions while I embark on a longer-term learning process about DAFs:

(1) Any recommendations for good resources to consult (books, articles, etc) on DAFs, other than the wiki on this BH site?

(2) Although my sister is not listed as an account advisor, she has some good ideas for contributions that can make a difference (and my relative would like that). However, I am a bit nervous about some of the ideas she had insofar as it might violate IRS rules. Specifically (example) there is an organization in my area that is hosting a benefits dinner where the proceeds will go towards veterans, but the event comes with a meal/speaker. I noticed in the BH DAF Wiki a comment: There are some IRS conditions regarding approval of these grants (no personal gain, no gifts to relatives, cannot fulfill a legal pledge, etc.).......So maybe I am overblowing this, but I was worried that "getting a meal out of it" would be a "personal gain", albeit tiny. Any thoughts on this? (And yes, it's a legit charity with years of runtime, with open/audited books that I've checked out on various "charity check" sites......)

(3) Any thoughts on a typical "percent of DAF assets" that you might distribute in a year? The "Safe Withdrawal Rate" method for retirement planning comes to mind, so I have tentatively chosen that approach until I come up with something better. Specifically, I've decided to distribute 5% of the assets per year. That "5%" could go to one entity, if there is a huge need in a specific area, or to 20 entities across a spectrum of categories.....just depends. Is that "Safe Donation Rate" a reasonable approach? (Yes, I realize the SWR is more typically 4%, or even lower given recent journal articles....but I felt 5% might be OK for a charitable situation). My relative did not opine on this specific question, and even if they did, the Traditional IRA "roll in" will increase the size of the fund by 20-fold.
BrokerageZelda
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by BrokerageZelda »

Some of the specifics of how to do things will depend on who the custodian of the DAF is. Is it the charitable arm of one of the big brokerages like Fidelity, Vanguard, or Schwab? Is it a local community foundation? Something else?
Topic Author
Carbonate24
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by Carbonate24 »

The DAF resides at Ayco/Goldman Sachs,...specifically at the Ayco Charitable Trust Foundation.
calwatch
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by calwatch »

Carbonate24 wrote: Tue Feb 22, 2022 9:06 pm (2) Although my sister is not listed as an account advisor, she has some good ideas for contributions that can make a difference (and my relative would like that). However, I am a bit nervous about some of the ideas she had insofar as it might violate IRS rules. Specifically (example) there is an organization in my area that is hosting a benefits dinner where the proceeds will go towards veterans, but the event comes with a meal/speaker. I noticed in the BH DAF Wiki a comment: There are some IRS conditions regarding approval of these grants (no personal gain, no gifts to relatives, cannot fulfill a legal pledge, etc.).......So maybe I am overblowing this, but I was worried that "getting a meal out of it" would be a "personal gain", albeit tiny. Any thoughts on this? (And yes, it's a legit charity with years of runtime, with open/audited books that I've checked out on various "charity check" sites......)
There is the IRS de minimis rule that allows for you to get a small token of appreciation but not something big. The amount for de minimis is $11.30. So a bumper sticker, tote bag, or coffee mug would be de minimis but not a meal. If you wanted to go to the event I would make a contribution separately to go, and a larger contribution from the DAF for the purposes of the charity. https://www.nolo.com/legal-update/irs-c ... 35445.html
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celia
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by celia »

I think there is a problem with leaving an IRA to a Donor Advised Fund. Anything withdrawn from the IRA would be taxed, which defeats the point of not having to pay taxes on assets going into the DAF. If you withhold taxes from IRA withdrawals, that decreases the amount available for charitable gifts. Then you will have to work together with the executor or successor trustee because of tax filing.

Was the deceased over 70.5? If so, they were likely making QCDs, but can’t any more since they died.

I’m not sure who you should talk to, but I would start with the IRA custodian as well as the one you use. Ask if a DAF can be the beneficiary of an IRA. Then ask if there is a way to avoid the taxes on the IRA withdrawals. And while you are at it, ask the DAF custodian if you could have a list of the charities that received money in the last 5 years or so. I would continue to contribute to them, unless any are morally objectionable to you. The custodian is likely responsible for confirming that the requested charity is eligible to receive a DAV grant. At least at Vanguard, they confirm the status of the org and that you don’t get a personal benefit from the donation.

I’m sorry to see that you were left with an awkward situation to handle. By any chance, was there a contingent (secondary) beneficiary? Did the deceased leave behind a spouse?

3) I wouldn’t use a safe withdrawal rate as that is meant to last your lifetime. Doing that would be awkward if a back-up DAV “manager” (like you) wasn’t specified since it might not be defined who is next, should you die with money still in the account. I would give the bulk away within 10 years (as that might be when the IRA would need to be emptied). Once money stops going into the DAV, you could do one more round of gifts and empty the DAF account.
Last edited by celia on Wed Feb 23, 2022 5:18 am, edited 1 time in total.
TheGreyingDuke
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by TheGreyingDuke »

celia wrote: Wed Feb 23, 2022 4:55 am There is a problem with leaving an IRA to a Donor Advised Fund. Anything withdrawn from the IRA would be taxed, which defeats the point of not having to pay taxes on assets going into the DAF. If you withhold taxes from IRA withdrawals, that decreases the amount available for charitable gifts. Then you will have to work together with the executor or successor trustee because of tax filing.
Is this so? I had been led to believe otherwise:
Donating an IRA to charity upon death
When you name a charity as a beneficiary to receive your IRA or other retirement assets upon your death, rather than donating retirement assets during your lifetime, the benefits multiply:

Neither you and your heirs nor your estate will pay income taxes on the distribution of the assets.
Your estate will need to include the value of the assets as part of the gross estate but will receive a tax deduction for the charitable contribution, which can be used to offset the estate taxes.
Because charities do not pay income tax, the full amount of your retirement account will directly benefit the charity of your choice.
It’s possible to divide your retirement assets between charities and heirs according to any percentages you choose.
You have the opportunity to support a cause you care about as part of your legacy.
https://www.fidelitycharitable.org/guid ... arity.html
"Every time I see an adult on a bicycle, I no longer despair for the future of the human race." H.G. Wells
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celia
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by celia »

TheGreyingDuke wrote: Wed Feb 23, 2022 5:14 am
celia wrote: Wed Feb 23, 2022 4:55 am There is a problem with leaving an IRA to a Donor Advised Fund. Anything withdrawn from the IRA would be taxed, which defeats the point of not having to pay taxes on assets going into the DAF. If you withhold taxes from IRA withdrawals, that decreases the amount available for charitable gifts. Then you will have to work together with the executor or successor trustee because of tax filing.
Is this so?
I understand that the IRA beneficiary is not a charity, but more like a foundation. Maybe it is a charity too (whose purpose is to distribute funds), but I’m not sure. So OP needs to find out.
brawlrats
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by brawlrats »

celia wrote: Wed Feb 23, 2022 5:28 am
TheGreyingDuke wrote: Wed Feb 23, 2022 5:14 am
celia wrote: Wed Feb 23, 2022 4:55 am There is a problem with leaving an IRA to a Donor Advised Fund. Anything withdrawn from the IRA would be taxed, which defeats the point of not having to pay taxes on assets going into the DAF. If you withhold taxes from IRA withdrawals, that decreases the amount available for charitable gifts. Then you will have to work together with the executor or successor trustee because of tax filing.
Is this so?
I understand that the IRA beneficiary is not a charity, but more like a foundation. Maybe it is a charity too (whose purpose is to distribute funds), but I’m not sure. So OP needs to find out.
A foundation is a charity. DAFs are most definitely registered 501(c)(3) organizations.
Gill
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by Gill »

celia wrote: Wed Feb 23, 2022 4:55 am I think there is a problem with leaving an IRA to a Donor Advised Fund. Anything withdrawn from the IRA would be taxed, which defeats the point of not having to pay taxes on assets going into the DAF. If you withhold taxes from IRA withdrawals, that decreases the amount available for charitable gifts. Then you will have to work together with the executor or successor trustee because of tax filing.

Was the deceased over 70.5? If so, they were likely making QCDs, but can’t any more since they died.

I’m not sure who you should talk to, but I would start with the IRA custodian as well as the one you use. Ask if a DAF can be the beneficiary of an IRA. Then ask if there is a way to avoid the taxes on the IRA withdrawals. And while you are at it, ask the DAF custodian if you could have a list of the charities that received money in the last 5 years or so. I would continue to contribute to them, unless any are morally objectionable to you. The custodian is likely responsible for confirming that the requested charity is eligible to receive a DAV grant. At least at Vanguard, they confirm the status of the org and that you don’t get a personal benefit from the donation.

I’m sorry to see that you were left with an awkward situation to handle. By any chance, was there a contingent (secondary) beneficiary? Did the deceased leave behind a spouse?

3) I wouldn’t use a safe withdrawal rate as that is meant to last your lifetime. Doing that would be awkward if a back-up DAV “manager” (like you) wasn’t specified since it might not be defined who is next, should you die with money still in the account. I would give the bulk away within 10 years (as that might be when the IRA would need to be emptied). Once money stops going into the DAV, you could do one more round of gifts and empty the DAF account.
Aren’t you thinking of QCD’s? You can certainly name a DAF as beneficiary of an IRA
Gill
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robphoto
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by robphoto »

+1 on it's a 503C, and you can leave an IRA to it without tax being paid on it.

From the Schwab Charitable donation slip:

"Schwab Charitable Fund is recognized as a tax-exempt public charity as defined in Internal Revenue Code ("IRC") Sections 501(c)(3), 509(a)(1), and 170(b)(1)(A)(vi)."

That's why you can, say, donate appreciated stock to it, and the value of the stock is a charitable deduction. You've made a donation to a charitable organization, in this case Schwab Charitable, and then you get to "advise" them on how you'd like the money given away.

Also, as someone noted above, 4% is if you want the money to last through a typical retirement; for your case, it seems like you'd accomplish the mission by putting the money to work.
Last edited by robphoto on Wed Feb 23, 2022 6:45 am, edited 1 time in total.
robphoto
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by robphoto »

(duplicate post)
MrJedi
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by MrJedi »

Carbonate24 wrote: Tue Feb 22, 2022 9:06 pm (2) Although my sister is not listed as an account advisor, she has some good ideas for contributions that can make a difference (and my relative would like that). However, I am a bit nervous about some of the ideas she had insofar as it might violate IRS rules. Specifically (example) there is an organization in my area that is hosting a benefits dinner where the proceeds will go towards veterans, but the event comes with a meal/speaker. I noticed in the BH DAF Wiki a comment: There are some IRS conditions regarding approval of these grants (no personal gain, no gifts to relatives, cannot fulfill a legal pledge, etc.).......So maybe I am overblowing this, but I was worried that "getting a meal out of it" would be a "personal gain", albeit tiny. Any thoughts on this? (And yes, it's a legit charity with years of runtime, with open/audited books that I've checked out on various "charity check" sites......)
Did not see this one addressed yet.

If it's an open gift without strings attached, there is no issue.

The issue is if you're talking something like maybe a charity gala and there's a price for admission. Those have special rules on tax deductibility and typically only a portion of the ticket price is deductible. A DAF cannot give to something like that to cover your admission. But if you're giving to the org and you are allowed to attend the event regardless of the gift or not, there is not actually a personal gain since it was not required to begin with.
dognose
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by dognose »

I posed this question recently to my CPA and estate-planning lawyer. They confirmed that a donor-advised fund can be the beneficiary of an IRA. Happens all the time, they said.
Topic Author
Carbonate24
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by Carbonate24 »

Thank you all - very helpful info to kick-start my education and action plan.

To answer a question above, at this time, there is not a successor to my role, but I guess I can designate that person....again much to learn.
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Carbonate24
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by Carbonate24 »

Posting a follow-up to my own question.......

Back in February, I posted a few questions regarding Donor Advised Funds (DAF). I got some good feedback, thank you. I still have one area I am struggling with. Quick Summary: A relative passed away and made me the successor custodian to a DAF. I have completed processing all the paperwork, and I am now set up as the (sole) custodian of the DAF (and I have designated my sister as the successor custodian). Combining the assets that were already in the DAF with the Traditional IRA assets that recently been added to the account, the size is pretty large (from my perspective). There is about $2 million in DAF currently, invested in total market index type fund. The original feedback to my question back in February centered largely around the IRA being donated to the DAF....I've worked all that out, so don't need any guidance on that aspect. I need guidance on how to appropriately grant money, as described below.

I've been charitable over the years giving to church and numerous other things I support, anywhere from a few thousands of dollars per year to maybe $15k-$20k per year. But a reasonable pace of grants from this DAF would likely far exceed what I've done from my personal accounts...so I need to put some thought into this / think differently. I want to approach this thoughtfully and responsibly. The deceased instructions to me were to "put it to good use" and their typical contribution was $10,000 per year to their church. I plan to increase the contributions to the charities I already support with input from my sister. But I feel like I need to do more research....learn more about the need out there, learn more about charitable organizations, etc. With a family and a full time job, I don't have lots of spare time to do the kind of research I probably need to do, so anything that can jump start my journey would be helpful. I live in a suburb of a major city, but I wouldn't necessarily constrain grants to local organizations...I would anticipate making grants to larger organizations with wide reach (e.g. St Jude's).

Any thoughts on how to approach this?
jebmke
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by jebmke »

At some point I will probably face this same issue. One thing I plan to do is to start a discussion with the head of a community foundation in this area. I have worked with them on several fund raising projects for a local charity and I know them pretty well. They support a lot of different charities in a 4 county area around me. If I am comfortable with their processes and selection criteria, I may carve out a significant amount and channel it from our DAF to them.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
HENRYGRUGER
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by HENRYGRUGER »

Carbonate24 wrote: Sun Aug 07, 2022 2:59 pm

I've been charitable over the years giving to church and numerous other things I support, anywhere from a few thousands of dollars per year to maybe $15k-$20k per year. But a reasonable pace of grants from this DAF would likely far exceed what I've done from my personal accounts...so I need to put some thought into this / think differently. I want to approach this thoughtfully and responsibly. The deceased instructions to me were to "put it to good use" and their typical contribution was $10,000 per year to their church. I plan to increase the contributions to the charities I already support with input from my sister. But I feel like I need to do more research....learn more about the need out there, learn more about charitable organizations, etc. With a family and a full time job, I don't have lots of spare time to do the kind of research I probably need to do, so anything that can jump start my journey would be helpful. I live in a suburb of a major city, but I wouldn't necessarily constrain grants to local organizations...I would anticipate making grants to larger organizations with wide reach (e.g. St Jude's).

Any thoughts on how to approach this?
Carbonate...

There are countless worthwhile charities in he USA. Trying to decide which ones are "most deserving" etc. is really a question without an answer.

Since these funds were amassed by a deceased relative, perhaps the place to start is with this question, "When HE was alive, where did HE send his charitable contributions?"

Like you, I make personal contributions annually. I am currently using QCDs. I currently support World Vision (4 children in counties I will never visit,) St.Judes, Shriner's Hospital, my local Salvation Army shelter, a local animal rescue/no kill shelter, two local Volunteers Fire Departments, Tunnels to Towers (Veterans) Charity, and a major American Indian children's charity. I am also funding a gift to my original community college, which when completed in 3-5 years, will fund two "endowed" scholarships, one for GED completion students and one for 2nd year ADN Nursing students. I am an academic, so I also find a "President's Circle Gift" to my own institution, annually, earmarked for our Veteran's Center. (I am a Viet Nam Vet.)

My wife and I agree on where we send our money and we have committed to continue our support after either of us is gone, as long as practical.

My advice...concentrate on your own community, as "charity begins at home." Then add national charities who have demonstrated that the money they gather and disburse goes to those in need, not to those in greed.

Good Luck.
ModifiedDuration
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by ModifiedDuration »

I have found the Charity Navigator website to be helpful in reviewing charities:

“Since 2001, we've been empowering millions of donors by providing them with free access to data, tools, and resources to guide philanthropic decision-making. Through our ratings, nonprofits are equipped with the nonprofit sector's premier trust indicator and a powerful platform to raise awareness and funds.

Accessed more than 11 million times annually, donors can give with confidence knowing the organizations that are highly rated on Charity Navigator efficiently steward donations and are accountable and transparent. While we have a large footprint and an established, trusted brand, our team of approximately 25 considers itself small-but-mighty.”

https://www.charitynavigator.org/
VG81
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by VG81 »

Some other sites that you may find helpful/interesting:

https://www.centreforeffectivealtruism.org/ and William MacAskill's book, Doing Good Better: How Effective Altruism Can Help You Make a Difference.

https://www.givewell.org/ mentioned in Ron Lieber's 2014 New York Times article, "https://www.nytimes.com/2014/04/26/your ... -work.html"
itsmeagain
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by itsmeagain »

Here's a Bogleheads thread that I found useful about charities.
viewtopic.php?p=6050136

I especially liked the idea of the "Givewell" organization that was suggested by someone else, which I now use via a DAF.
https://www.givewell.org/charities/top-charities
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FreddieFIRE
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by FreddieFIRE »

HENRYGRUGER wrote: Sun Aug 07, 2022 3:56 pm I currently support World Vision
This is one of the few charities that I will support without a second thought. IIRC, WV is the default ultimate beneficiary on my Fidelity DAF (i.e. the charity that receives any residual funds if the DAF goes dormant).
A house and a job. Once the American dream. Two things I'll never again have. Life is simple (and good).
calwatch
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by calwatch »

Carbonate24 wrote: Sun Aug 07, 2022 2:59 pm I've been charitable over the years giving to church and numerous other things I support, anywhere from a few thousands of dollars per year to maybe $15k-$20k per year. But a reasonable pace of grants from this DAF would likely far exceed what I've done from my personal accounts...so I need to put some thought into this / think differently. I want to approach this thoughtfully and responsibly. The deceased instructions to me were to "put it to good use" and their typical contribution was $10,000 per year to their church. I plan to increase the contributions to the charities I already support with input from my sister. But I feel like I need to do more research....learn more about the need out there, learn more about charitable organizations, etc. With a family and a full time job, I don't have lots of spare time to do the kind of research I probably need to do, so anything that can jump start my journey would be helpful. I live in a suburb of a major city, but I wouldn't necessarily constrain grants to local organizations...I would anticipate making grants to larger organizations with wide reach (e.g. St Jude's).

Any thoughts on how to approach this?
Many pastors sit on boards of other charities in the region. Find out if they do, and that is a good place to start for other worthy causes. St. Jude's has had controversy - https://www.propublica.org/series/st-ju ... t-billions . Perhaps if you are interested in alleviating the suffering of kids in need, your local hospital, or a regional Shriner's hospital, may be the best choice.
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GerryL
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by GerryL »

Carbonate24 wrote: Tue Feb 22, 2022 9:06 pm
(3) Any thoughts on a typical "percent of DAF assets" that you might distribute in a year? The "Safe Withdrawal Rate" method for retirement planning comes to mind, so I have tentatively chosen that approach until I come up with something better. Specifically, I've decided to distribute 5% of the assets per year. That "5%" could go to one entity, if there is a huge need in a specific area, or to 20 entities across a spectrum of categories.....just depends. Is that "Safe Donation Rate" a reasonable approach? (Yes, I realize the SWR is more typically 4%, or even lower given recent journal articles....but I felt 5% might be OK for a charitable situation). My relative did not opine on this specific question, and even if they did, the Traditional IRA "roll in" will increase the size of the fund by 20-fold.
The way I have written my estate plan, any individual stock I still have (in taxable) will go into the DAF. Depending on how long I live and how the stock fares, this could be a lot or not so much. My nephew is the successor advisor. I am instructing him to use my past giving as guidance for how to distribute the funds in the DAF and am asking him to deplete the account in no more than ten years maximum. If he wants to do it all in the first year, that is fine, but I am not looking to have a DAF continue in my name long after I am gone.

Did your relative leave you any written guidance about this?
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Carbonate24
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by Carbonate24 »

The relative did not leave written guidance.....he just told me verbally to use it wisely (do my due diligence, worthy causes, etc). He donated primarily to his church, and then one-off distributions in time of need (like a natural disaster). I've solicited opinions of close family members, but they all said they would be comfortable with what I select (those family members have no official role in the DAF.....I just sought them out for ideas).

As far as timeframe, my planning basis so far is to distribute between 5% and 10% per year.......but that's just a striating point as I hone in on a better distribution plan.
DJZ
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by DJZ »

Carbonate24 wrote: Sun Aug 07, 2022 2:59 pm Posting a follow-up to my own question.......

Back in February, I posted a few questions regarding Donor Advised Funds (DAF). I got some good feedback, thank you. I still have one area I am struggling with. Quick Summary: A relative passed away and made me the successor custodian to a DAF. I have completed processing all the paperwork, and I am now set up as the (sole) custodian of the DAF (and I have designated my sister as the successor custodian). Combining the assets that were already in the DAF with the Traditional IRA assets that recently been added to the account, the size is pretty large (from my perspective). There is about $2 million in DAF currently, invested in total market index type fund. The original feedback to my question back in February centered largely around the IRA being donated to the DAF....I've worked all that out, so don't need any guidance on that aspect. I need guidance on how to appropriately grant money, as described below.

I've been charitable over the years giving to church and numerous other things I support, anywhere from a few thousands of dollars per year to maybe $15k-$20k per year. But a reasonable pace of grants from this DAF would likely far exceed what I've done from my personal accounts...so I need to put some thought into this / think differently. I want to approach this thoughtfully and responsibly. The deceased instructions to me were to "put it to good use" and their typical contribution was $10,000 per year to their church. I plan to increase the contributions to the charities I already support with input from my sister. But I feel like I need to do more research....learn more about the need out there, learn more about charitable organizations, etc. With a family and a full time job, I don't have lots of spare time to do the kind of research I probably need to do, so anything that can jump start my journey would be helpful. I live in a suburb of a major city, but I wouldn't necessarily constrain grants to local organizations...I would anticipate making grants to larger organizations with wide reach (e.g. St Jude's).

Any thoughts on how to approach this?
Carbonate,

I hope you will give some thought to the effective altruism philosophy of giving. The goal is to be thoughtful and thereby impactful.

They try to identify problems that satisfy three criteria: they should be *important*, *tractable*, and *underfunded*.

In practice this excludes a lot of traditional recipients. For instance as much as I value education, I no longer give to my university. They have literally billions of dollars, and my additional contribution won’t be meaningful. Instead, perhaps deworming projects or bed nets to reduce malaria. These reduce suffering greatly and have huge bang for buck.

Check out https://www.givewell.org/ and https://www.effectivealtruism.org/

You will find a lot of great ideas at GiveWell! They can really help advance your research.
Topic Author
Carbonate24
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by Carbonate24 »

I have gotten some very helpful feedback here......I am glad I posted this - certainly helps jump start my journey.
Swansea
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by Swansea »

I find that serving as a volunteer in a local non-profit gives great insight to their focus. Also, IRS 990 form review is a must.
jebmke
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Re: Donor Advised Fund (DAF) Newbie Questions

Post by jebmke »

Swansea wrote: Mon Aug 08, 2022 6:08 am I find that serving as a volunteer in a local non-profit gives great insight to their focus. Also, IRS 990 form review is a must.
Same here. And an advantage of using a DAF (versus, say QCDs) is that you can donate anonymously and not disrupt how you are viewed as a volunteer. I am on a board of a local charity and they have no knowledge that I am also a major donor.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
DJZ
Posts: 158
Joined: Fri Jul 03, 2020 6:42 pm

Re: Donor Advised Fund (DAF) Newbie Questions

Post by DJZ »

jebmke wrote: Mon Aug 08, 2022 6:12 am
Swansea wrote: Mon Aug 08, 2022 6:08 am I find that serving as a volunteer in a local non-profit gives great insight to their focus. Also, IRS 990 form review is a must.
Same here. And an advantage of using a DAF (versus, say QCDs) is that you can donate anonymously and not disrupt how you are viewed as a volunteer. I am on a board of a local charity and they have no knowledge that I am also a major donor.
The other nice thing about GiveWell.org is that they too are a 501c3, so they are funded separately from the charities that they research and recommend. So if you give through them, they do not take a cut.

You can also give to GiveWell, which funds their research.

Here’s their list of most impactful charities: https://www.givewell.org/charities/top-charities
LookinAround
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Joined: Tue Mar 27, 2018 5:41 am

Re: Donor Advised Fund (DAF) Newbie Questions

Post by LookinAround »

DJZ wrote: Mon Aug 08, 2022 8:54 am
jebmke wrote: Mon Aug 08, 2022 6:12 am
Swansea wrote: Mon Aug 08, 2022 6:08 am I find that serving as a volunteer in a local non-profit gives great insight to their focus. Also, IRS 990 form review is a must.
Same here. And an advantage of using a DAF (versus, say QCDs) is that you can donate anonymously and not disrupt how you are viewed as a volunteer. I am on a board of a local charity and they have no knowledge that I am also a major donor.
The other nice thing about GiveWell.org is that they too are a 501c3, so they are funded separately from the charities that they research and recommend. So if you give through them, they do not take a cut.

You can also give to GiveWell, which funds their research.

Here’s their list of most impactful charities: https://www.givewell.org/charities/top-charities
I like to use Charity Navigator.
> Also a 501(c)3
> They rate and provide info about 195,000+ different charities (including their Form 990 they filed)
jebmke
Posts: 25474
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: Donor Advised Fund (DAF) Newbie Questions

Post by jebmke »

LookinAround wrote: Mon Aug 08, 2022 9:51 am I like to use Charity Navigator.
> Also a 501(c)3
> They rate and provide info about 195,000+ different charities (including their Form 990 they filed)
I have found this lacking good information on smaller, local stuff. I've also been surprised by fairly high ratings on some well-known national charities that have very high administrative and fundraising expenses.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
DJZ
Posts: 158
Joined: Fri Jul 03, 2020 6:42 pm

Re: Donor Advised Fund (DAF) Newbie Questions

Post by DJZ »

LookinAround wrote: Mon Aug 08, 2022 9:51 am
DJZ wrote: Mon Aug 08, 2022 8:54 am
jebmke wrote: Mon Aug 08, 2022 6:12 am
Swansea wrote: Mon Aug 08, 2022 6:08 am I find that serving as a volunteer in a local non-profit gives great insight to their focus. Also, IRS 990 form review is a must.
Same here. And an advantage of using a DAF (versus, say QCDs) is that you can donate anonymously and not disrupt how you are viewed as a volunteer. I am on a board of a local charity and they have no knowledge that I am also a major donor.
The other nice thing about GiveWell.org is that they too are a 501c3, so they are funded separately from the charities that they research and recommend. So if you give through them, they do not take a cut.

You can also give to GiveWell, which funds their research.

Here’s their list of most impactful charities: https://www.givewell.org/charities/top-charities
I like to use Charity Navigator.
> Also a 501(c)3
> They rate and provide info about 195,000+ different charities (including their Form 990 they filed)
I like Charity Navigator as well, but they are agnostic about the utility of the cause. GiveWell is about effectiveness.

An example sometimes given: A charity might train seeing eye dogs for blind US citizens. These cost $50,000 to train (https://puppyintraining.com/how-much-do ... -dog-cost/) and several thousand per year to maintain. And of course the individual is still blind.

Cataract surgery can cure blindness and can be done for less that $50 per eye in a third world country.

Admittedly this example suffers from some apples v oranges issues. But the idea of effective altruism is that certain approaches to a problem can be not just 10 or 20 percent better than others, but 10 to 20 *times* better than others.
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