a creative and dynamic philanthropic tool. what is a daf? according to the irsaccording to the irs,...
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A Creative and Dynamic Philanthropic Tool
What is a DAF?
According to the IRS, it is a
separately identified fund
maintained, operated, and legally controlled by a
section 501(c)(3) organization
this may be a community foundation, public
charity, or a charitable fund associated with an investment firm
Your Organization
How does a DAF work?
Why? But first
Who wants a DAF?
Let me tell you about some of the donors I’ve worked with recently
Donor 1: Yolanda Yoda
So, you might be if…
you have received a large inheritance or other financial windfall, and need a year-end tax deduction, but want to give over time
you like to choose which grants to make
you wonder if your financial contributions are making a real difference (been burned?)
So, you might find be if…
You have considered You have You are closing down a
Private Foundation
Donor 2: Mary Memorial-Mission
So, you might be if…
you’re inexperienced, want others to contribute, pay tribute to someone’s life or work
you like to choose which grants to make
you wonder if your financial contributions will make a real difference
Donor Three: Terry Toe-Dipper
So, you might find be if…
You’re new to giving, are “saving up” for a big project during your working years or with employer matches
you like to choose which grants to make (or want anonymity)
you want your financial contributions to make a real difference
So, where do DAFs fit in the charitable scheme of things?
Who offers DAFs?
Nationals – Fidelity, Vanguard, National Philanthropy Trust, North Star (NYC)
Single Issues Charity – Columbia University
Community Foundations created in the 1930's, although Congress didn't establish the legal
structure for them until 1969. In the 1990's, donor-advised funds began to grow in visibility and popularity
http://www.columbia.planyourlegacy.org/brochures/daf.pdf
Let’s look more closely
National Philanthropic Trust studied:
Source: National Philanthropic Trust’s 2013 Donor Advised Fund Report
Key Findings about DAFs
$45B in assets (end of 2012)
Amount to 4% of giving in US (6% of individual giving)
Number of DAFs is increasing (7% more opened in 2012 than 2011)
Grant rate at all time high (16% payout
rate in 2013) Source: National Philanthropic Trust’s 2013 Donor Advised Fund Report
Is there a lot of $$$s in DAFs?
So, if I can open a DAF at a national organization why would I choose a Community Foundation?
Why choose a Community Foundation?
Donor can create a fund with $5,000 (open for 5 years, minimum $250 grant)
Donor has access to WCF staff to help determine which LOCAL organizations best fit funding priorities (can give nationally)
Donor might want in-depth analysis of issues and strategies to facilitate grantmaking
Other funds are offered, too Type of Funds Offered (in order of declining donor control)
Designated Field of Interest Donor Advised Unrestricted
93 Donor Advised Funds (out of 193 funds) (NYCT has 1348 DAFs)
$13.3M in DAFs, average size=$139,785
Donor has access to WCF staff to help determine which organizations best fit his/her “funding priorities”
DAF and/or a PF?(if you are considering a private foundation)
DAF saves $$$ on staff and overhead
rely on our experienced administrative staff to manage all due diligence on grants
we can work with donors’ needs and develop a donor advised fund accordingly (hybrid: DAF & FOI)
minimum initial contribution of $5,000
name your fund (anonymous?)
who are the donor advisors?---and---
What do I need to set up a DAF?
minimum initial contribution of $5,000, but can be $$$
Can participates in a CF’s investment pool or several other investments – depends on your planning horizon
Administrative fee of .050% on the fund
Investment fee depends on investments chosen
An INVESTMENT choice
The Urban Institute’s Survey on DAFs
Results announced in a Webinar: August 21, 2014
called
What They Learned, and Why It
Matters
Urban Institute Survey on DAFs
Urban Institute Survey Takeaways
DAFs are an entry point to community engagement for donors
88% of community foundations report DAF donors participate in event sponsored by the foundation
81% of community foundations report DAF donors serve on the foundation’s board , or in another leadership role
68% of community foundations report DAF s help the foundation address pressing community needs
Urban Institute’s Survey on DAFs was in response to
Would impose a 5 year pay-out on DAFs
Where does this leave you?
Is this good? Bad?
Tapping into DAFs
Keep a record of who is using a DAF
Read the annual reports of CFs
Check website of commercial DAF holders
https://www.bankofamerica.com/philanthropic/grantmaking.go
From Fidelity Charitable’s Giving Report 2014
Put a Widget on your Websitehttps://www.dafdirect.org/DAFDirect/
Tapping into DAFs
But you really have to
Build relationships with donors! The old-fashioned way…
200 North Central Park Ave, Suite 310Hartsdale, NY 10530
www.WCF-NY.org
Gathering, growing, granting charitable funds