Timing is of the essence when opening a donor-advised fund with your client. Yet, like the market and taxable events, timing is often unpredictable.

Opening a donor-advised fund now can ensure it’s ready to accept your preferred charitable assets at the precise time you wish to donate them.

Here are the top considerations for when to open – and fund – a donor-advised fund:

  1. Placeholder Funds for Strategic Planning

Assess the need for a placeholder fund. A placeholder fund can ensure a donor-advised fund account is in place so donors can swiftly fund it when the ideal contribution time arrives, usually within a few months.

  1. Immediate vs. Strategic Funding

Determine if making immediate contributions to the donor-advised fund aligns with current financial goals. Delaying funding could optimize tax benefits or accommodate upcoming financial events, like the sale of a business, receipt of a bonus or other influx of income.

  1. Account Opening Process

Recognize potential delays in opening donor-advised funds, especially during peak giving seasons. Advise clients tostart the process early to avoid missed opportunities and dissatisfaction.

  1. Asset Types and Donation Timelines

Understand the timeframes associated with donating various assets, such as cash, publicly traded stocks, real estate and illiquid assets like privately held stock or cryptocurrency. This ensures clients fund donor-advised fund accounts with the ideal assets at the proper time.

  1. Legacy Funds for Estate Planning:

Explore the benefits of establishing a legacy donor-advised fund as part of an estate planning strategy, funding it in several years or after the donor’s death. Discuss options for naming the donor-advised fund as a charitable beneficiary of a retirement account to optimize tax efficiency and facilitate ongoing charitable giving beyond the client’s lifetime.

  1. Ongoing Investment Management

Discuss opportunities for financial advisors to continue administering donor-advised fund assets after the client’s death. This can ensure continuity in charitable giving and advisor-client relationships with family members.

  1. Flexibility in Selecting Grantees

Consider the flexibility provided by donor-advised funds for recommending grantees, especially for clients who want to avoid naming specific charities in their estate plans. With a donor-advised fund, donors and their heirs can recommend which charities to support over time.

Learn why some advisors establish donor-advised funds now and later.


American Endowment Foundation (AEF) is one of the nation’s largest independent donor-advised fund sponsors. AEF expands philanthropy by partnering with firms and advisors in the financial services industry, enabling more donors to create a significant charitable impact. To learn more about AEF’s resources for donors and financial advisors, or to open a donor-advised fund, visit aefonline.org or call us at 1-888-966-8170.