Helpful Planning Tips After Creating a Donor Advised Fund
by Ken Nopar, Senior Philanthropic Advisor
Most donors who create donor advised fund accounts have a good idea of the types of charities they wish to support in the near or distant future. Some, however, may not yet have developed a charitable mission or strategy, while others may have established accounts largely because of the recommendation of their financial, tax, or legal advisors.
AEF has reached out to some of the leading philanthropic advisory firms in the country to ask for general advice they would provide to donors who have recently established DAF accounts at AEF:
- Donors should " begin by discovering WHY they give, reflective of their own unique life journeys, values, and motivations for giving," and " to determine HOW to best identify giving opportunities and desired impact." Colleen D. Mitchell, VENTURE3Philanthropy LLC
- " What often begins as a tax driven decision can become a rewarding and meaningful philanthropic experience when it is guided by their personal values and interests. It helps when they take the time to ask themselves what they believe will make the world a better place." Carolyn O’Brien, MissionBridge Philanthropy
- " When it comes to getting the most out of their DAF, a little planning makes a BIG difference. Knowing their charitable vision and mission keeps them focused and able to navigate the endless opportunities to contribute." Kia Sullivan, SourcePoint Philanthropy
- " Being strategic about giving through their DAF doesn't require a complex plan. In fact, complexity often gets in the way of impact. Instead, look for 'next step' ways to build on gifts they've already made or find other donors or partners who can leverage their charitable investments." Kris Putnam-Walkerly, Putnam Consulting Group
- " Just like a foundation, a donor advised fund is a powerful tool to engage the rising generations in their family in defining values, developing a Mission Statement and working together to achieve common philanthropic goals. Through grantmaking and impact investing, all of their philanthropically-committed capital can help achieve those goals." Bruce DeBoskey, The DeBoskey Group
- " As families begin to consider, incorporate and engage the succeeding generations in their philanthropic process, there is an increasing need for several key things; clarity of purpose, creating opportunities to give individually and collectively, and building effective communication and collaboration across the family." Rebecca Trobe, Impact Coaching & Consulting, LLC
- " If donors are looking for a cause to support, they should reflect on what gives them joy or makes them angry. If looking for charities, they should research them like an investment. Effective charities can maximize the donor’s gift by creating social impact within the community." Catherine Chapman, Fullanthropy
- " The first question the donor needs to answer is what will be the intent of the gift. Will this be a one-time or multi-year gift, for a specific initiative or for general operating funds? The best gift to an organization is one accompanied by thoughtful and clear directives and expectations." Susan Winer, Strategic Philanthropy, Ltd.
- Mark Neithercut from Neithercut Philanthropic Advisors, LLC would advise donors to envision looking back in a year and ask " what happened during that period that would make them pleased with their philanthropic activity and grant-making from their donor advised fund account?"
- " When thinking about giving, donors should articulate their values. When they give in alignment with their values, they can lead happier, healthier lives and allow the recipients of their giving to do so as well. " Deborah Goldstein, Enlightened Philanthropy
It is helpful for donors to discuss their charitable planning goals with their financial advisors, accountants, and estate planning attorneys so they can provide the best possible investment, tax, and legal advice. For those donors who may need additional help with their charitable planning, AEF has developed a Philanthropic Advisory Firm Referral Program.
Some of the topics that families or individuals with donor advised funds should initially consider or discuss among themselves or with their advisors include:
- Who is or will be involved in the charitable giving decisions?
- What is the timeframe for giving? During lifetime, at death, after death, or for how many years or generations after death?
- Which assets can or should be donated? Are there any other assets (i.e. real estate, insurance, IRA, businesses) that the donor does not need or want or intends to sell?
- How much additional do the donors want to donate and at what point?
- How should their financial advisor invest these charitable assets?
- Which causes and charities do the donors want to support?
Donors who establish accounts at AEF are always pleased that grantmaking is so easy and efficient. Those who take the time to plan, on their own or with the help of their trusted advisors, develop an even higher sense of satisfaction, pride, and confidence in knowing that their generous grants will have an impact upon the causes and charities that are most important to them.