a creative and dynamic philanthropic tool. what is a daf? according to the irsaccording to the irs,...

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