What is a Donor-Advised Fund (DAF)?
In the most relatable terms, a donor-advised fund (DAF) is like a 401(k) or IRA for charitable giving. It allows donors to make charitable contributions, receive an immediate tax deduction, and then recommend grants from the fund over time to their favorite nonprofits.
Think of it this way: Just like the money and assets you funnel into a 401(k) are explicitly designated for retirement, the money and assets you deposit into a donor-advised fund are reserved for donations to 501(c)(3) charitable organizations.
How does a Donor-Advised Fund work?
- Opening an Account: You can open a DAF with no minimum contribution or balance requirement.
- Contributions: Donate cash, stocks, or other assets to your DAF and receive an immediate tax deduction, and that money grows tax-free.
- Grant Recommendations: Recommend grants to IRS-qualified public charities at any time, either immediately or over time, like The Ehlers-Danlos Society, which is working to improve the lives of people with EDS and HSD.
What are the tax benefits of a DAF?
According to Fidelity Charitable:
When you contribute to a DAF, you get an immediate tax deduction, even if you don’t give the money to a non-profit right away. This can help reduce your tax bill now while letting you take your time deciding how to make the biggest impact.
When you set up a DAF, you don’t need to search for receipts in your inbox, desk drawer, and wherever else you may have stashed them. Your DAF account serves as a single record for every gift, which makes—at least this aspect of tax time—delightfully painless.
Can I donate assets other than cash!
Yes! You can donate things like stocks, real estate, or even shares of your business to a DAF. This can be a smart way to give, especially if those assets have grown in value, because you won’t have to pay capital gains taxes, and the full value can support your favorite causes like The Ehlers-Danlos Society.
How do I set up a Donor-Advised Fund?
Setting up a DAF is easy. You can start one with a community foundation, a financial institution, or a charitable organization that offers DAFs. You make an initial donation, and then you can continue to contribute over time, while deciding which causes to support.
Can I support any charity with my DAF?
Yes, you can recommend grants to any 501(c)(3) IRS-qualified public charity such as The Ehlers-Danlos Society.
How do I recommend a grant from my DAF?
Once your DAF is funded, you can recommend grants online, by phone, fax, or mail. You can also set up recurring grants for ongoing support to your favorite charities.
How are grants from Donor-Advised Funds distributed to charities?
When you’re ready, you can recommend grants from your DAF to organizations like The Ehlers-Danlos Society, online, by phone, fax, or mail. You can also set up recurring grants for ongoing support. We’ll receive the funds quickly and can use them to fund vital research and support programs that directly impact those living with EDS and HSD. Our partners at Every.org make initiating a grant from your DAF simple.
Can I remain anonymous when giving through a DAF?
Yes, you have the option to include your name and address or remain anonymous when recommending a grant.
How can my contributions grow over time?
Your contributions can be invested and grow tax-free, potentially increasing the amount available for future grants while you decide which charities to support.
What are the differences between a Donor-Advised Fund and a private foundation?
A DAF is much easier and less expensive to set up and run than a private foundation. With a DAF, you get all the benefits of managing your giving without the heavy paperwork and regulations that come with a foundation.
What happens to the funds in a Donor-Advised Fund if the donor passes away?
You can name a successor to manage the DAF after you’re gone or designate non-profits like The Ehlers-Danlos Society to receive the remaining funds. This ensures that your passion for helping others continues, even after you’re no longer here.
Why Should You Give to The Ehlers-Danlos Society?
- Impactful Mission: The Ehlers-Danlos Society is at the forefront of improving diagnosis, treatments, and care for those affected by EDS and HSD. Our work ensures that future generations, including your own family, can enjoy better health and quality of life.
- Vital Research: Funding from donors like you helps drive crucial research that could lead to breakthroughs in understanding these complex conditions. This research is essential for finding better ways to diagnose and treat EDS and HSD.
- Support for Families: With your help, The Ehlers-Danlos Society can provide support to thousands of families impacted by EDS and HSD, offering hope and resources to improve their daily lives.
- Statistics to Consider: Combined, the Ehlers-Danlos syndromes (EDS) affect an estimated 1 in 5,000 people globally. HSD and hypermobile EDS together are thought to affect 1 in 600 to 1 in 900. That’s millions of individuals who could benefit from better care and treatment. Your donation can be the difference between a lifetime of pain and a future full of possibilities.
By donating through a DAF, you can maximize your impact, ensuring that your support reaches those who need it most. Your generosity today can change lives tomorrow.