Some donors who establish donor-advised fund (DAF) accounts still need to establish a charitable mission or strategy. They might not even know which charities or causes they want to support, especially if they established accounts on the recommendation of their financial, tax, or legal advisors without a firm plan.

American Endowment Foundation (AEF) reached out to some of the leading philanthropic advisory firms for tips to help donors in the charitable planning process when they’re in need of direction. We asked for general advice they would offer those who have recently established DAFs, but the same applies to any donors needing guidance, ideas, or inspiration for charitable planning.

What Leading Philanthropic Advisory Firms Suggest to Donors

Sometimes donors need a little expert assistance on their philanthropic journey. Whether you’re starting out or revising your charitable giving plans, these tips from top philanthropic advisors will help guide you.

Give Your Giving a Purpose

Colleen D. Mitchell of VENTURE3Philanthropy LLC says donors should “begin by discovering WHY they give, reflective of their own unique life journeys, values, and motivations for giving.” This will help them “to determine HOW to best identify giving opportunities and desired impact,” Mitchell adds.

This perspective is consistent with the findings of AEF’s white paper, Unlocking Generosity: The Advisor’s Role in Inspiring Purpose and Impact, regarding why people give. Section 3.0 of the paper discusses the donor journey from inspiration to purpose, determining what motivates them, whether it be personal experience, faith, family, culture, current events, or anything else.

Once the “WHY” is nailed down, a donor’s purpose and goals can be solidified through a focused mission statement. Bruce DeBoskey of the DeBoskey Group says, “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.” DeBoskey adds, “Through grantmaking and impact investing, all of their philanthropically committed capital can help achieve those goals.”

Find Your Motivation & Make Your Mark

Some DAF donors start with tax-related motivations for giving, but a little discussion can help them determine the kind of legacy they want to leave behind. Advisors can guide donors toward this conversation. As Carolyn O’Brien of MissionBridge Philanthropy notes, “What often beings 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.”

It can also help these donors to look at donations to DAFs as investments in the change they want to see in the world. Catherine Chapman of Fullanthropy says, “If clients 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 client’s gift by creating social impact within the community.”

Involve Every Generation

Donors with heirs or large families can get them involved in charitable planning as soon as possible to guide the direction of the DAF and set the table for philanthropy. “Seek an opportune time to bring everyone together at a family meeting to present the concept and to hear about appetite for involvement (this may fall during a holiday season),” says Jeff Shaffer of JMC Philanthropic Advisors. “This gathering is an opportunity for the senior generation to share its vision, and for the next generation to respond.”

It’s immensely helpful to engage the next generation of donors, as this will increase the sense of urgency surrounding the decision-making process for the DAF. Rebecca Trobe of Impact Coaching & Consulting, LLC, says, “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.”

Make Sense of Your Grantmaking

It’s easy to get overwhelmed in the charitable planning process, and many donors burden themselves by trying to do too much. “Being strategic about giving through their DAF doesn’t require a complex plan,” says Kris Putnam-Walkerly of Putnam Consulting Group. “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.”

However, it does help to go in with a plan. There are some core factors that can help you get the most out of your grantmaking. “The first question the client needs to answer is ‘what will be the intent of the gift?'” says Susan Winer of Strategic Philanthropy, Ltd. She continues, “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.”

Once you begin granting from a DAF, planning for the future can be made simple as well. Mark Neithercut of Neithercut Philanthropic Advisors LLC advises clients to “envision looking back in a year and ask what happened during that period that would make them pleased with their philanthropic activity and grantmaking from [the] donor-advised fund account.”

Engage in Hands-On Philanthropy

Engaging in a hands-on way can help guide and influence future granting from your DAF. You may not have the capacity to volunteer, but you can still ask questions and get involved. “Engage the organizations you support, even in small ways,” says Kyle Peterson of Boldly Go Philanthropy. “You’d be surprised how many nonprofits never hear from their donors,” he continues, “But great value—even beyond the financial gift—can be created by asking great questions and providing constructive feedback to the nonprofit that you care so much about. Like any organization, nonprofits do better through feedback and engagement with their best supporters.”

Questions to Ask When Charitable Planning

There are several topics that families or individuals with DAFs should discuss among themselves as the charitable planning process begins. These could also be questions advisors ask clients to help get them started. Questions include:

  • Who is or will be involved in the charitable giving decisions?
  • What is the timeframe for giving? (i.e., during lifetime, upon death, for years or generations after death)
  • Which assets can or should be donated? Are there assets the donors do not need or want or that they intend to sell or donate? (i.e., real estate, insurance, IRA, businesses)
  • How much money do the donors want to donate and at what point?
  • How should their financial advisor invest the charitable assets?
  • Which causes and charities do the donors and their heirs want to support?

Asking these questions will set donors on the right path with their DAFs.

Ready to Start Charitable Planning? AEF Is Here.

It is helpful for donors to discuss their charitable planning goals with their financial advisors, accountants, and estate planning attorneys so they can receive the best possible investment, tax, and legal advice. If you want to learn more about how DAFs can fit into your goals, contact AEF to see how we can help.

Donors who establish DAFs with AEF and take the time to plan, whether on their own or with the help of a trusted financial, legal, tax, or philanthropic advisor, tend to develop a higher sense of satisfaction, pride, and confidenceknowing that their generous grants will have an impact on the causes and charities that mean the most to them.