Donor-Advised Funds (DAFs) can be a core offering for your clients.
Client relationships begin with understanding your client—not just their account details, but also their thoughts and aspirations regarding their assets.
Leaving a legacy is always top-of-mind.
A DAF is the most popular and fastest growing charitable giving option in the country. Why?
DAFs integrate well with your client’s philanthropic strategies, provide tax benefits and offer more flexibility in how and when they plan their legacy.
As a financial advisor, you may face a common challenge: clients eager to discuss charitable giving but unsure how to start.
The next time you connect with them, ask about their philanthropic goals, then take that opportunity to introduce donor-advised funds (DAFs) to them.
DAFs are charitable giving options administered by public charities.
They allow your clients to make contributions, receive immediate tax deductions, and recommend grants to various 501(c)3 organizations over time.
Incorporating DAFs into your advisory practice offers 5 key advantages:
Advisors like you use DAFs as a way to enhance client relationships and foster meaningful philanthropic conversations.
Meeting Evolving Client Expectations
Enhancing Financial Planning
Driving Client Retention
Educating & Adding Value
Contributing to Social Impact
Advisors asked. We answered.
As firms and financial advisors continue to integrate DAFs into their conversation, there are frequently asked questions that could help you better understand the process and help guide preliminary conversations with your clients.
Can I manage/custody the assets?
AEF does not manage assets gifted to us by our donors. AEF hires you at the recommendation of our donor to open an investment account managed by you to hold the gifted assets. AEF’s open architecture allows investment accounts to be opened on various custodial platforms.
Are there any contribution or balance requirements?
Individual donors can establish a donor-advised fund with a minimum of $25,000. Businesses and other organizations should call for details. After the initial contribution, you may make contributions of $1,000 or more at a time. The Minimum Maintenance Fund Balance requirement is $10,000.
Do I manage the assets?
Yes. AEF hires you to manage our gifted assets and provides an Investment Policy Statement.
How do I get compensated for my work?
AEF is the owner of all donor-advised fund assets. Accordingly, we engage you as a financial advisor and compensate you accordingly.
Can I transfer an existing DAF to AEF?
Yes. AEF can assist advisors and their clients in weighing the benefits of moving an existing donor advised fund, and, where appropriate, in completing the transfer.
Is there a minimum grant amount?
Yes. $250 is the minimum grant amount.
How does AEF charge for its services?
As the sponsor, AEF charges an administrative fee based on assets under management.
Does AEF accept RMDs or QCDs to a fund?
While some sponsoring organizations allow donors to make IRA distributions directly to donor-advised funds, these distributions will have to be reported to the IRS and the donor will have to pay income tax on the distribution.
For this reason, and out of an abundance of caution and concern for your donors, AEF chooses to NOT ACCEPT IRA distributions directly to a DAF during a donor’s lifetime.
How do you determine the fair market value of a contribution?
Fair Market Value (for purposes of the charitable contribution deduction) is determined on the date that contributions are received by AEF.
In the case of contributions of publicly traded stock, Fair Market Value is the average of the high and the low for the day that the assets were received by AEF. In the case of contributions of mutual funds, Fair Market Value is the closing price on the date of receipt by AEF.
Resources
Be prepared to answer client questions with some additional advisor resources.
What is the AEF difference?
AEF makes DAFs a priority.
It’s not a product offering, it’s our focus—making us one of the nation’s largest independent sponsors. We are here to support firms and advisors in delivering your business goals—and creating a charitable offering that becomes invaluable to your clients who want to expand their philanthropic efforts.
Streamlined Support and Administration
We work with you to establish and administer accounts and process grants to your donors’ favorite charities. Plus, we cover administrative tasks like processing gifts, managing paperwork, and vetting recommended grant recipients.
Wide-Range of Charitable Choice
Being cause neutral allows an unbiased approach to charitable giving. Your clients have more options when choosing from 501(c)3 charities.
Flexible Funding
Initial funding requirements are among the lowest in the industry, while also allowing you to invest and manage the assets on your firm’s platform.
Enhanced Advisor Platform
Our platform makes opening funds easier and provides you and your team with more visibility to fund activity. Plus, stay informed on industry trends and philanthropic thought leadership through a variety of industry resources.
Remember, AEF is the sole legal owner of all investment accounts and assets in a DAF. This requires our express written authorization prior to moving any funds within the DAF.
Ready to start the DAF process?
Start with these downloads. This should bring additional clarity and clarify next steps.
Already managing a DAF from AEF?
Great! Here are some policies to help ensure everything goes smoothly.