Third quarter results are in and clients are looking to you for their year-end planning strategies. If your clients are like most, they may have left you scrambling to optimize their taxes before the December 31st deadline. Have you thought about recommending a Donor Advised Fund (DAF)? Not only is this simple, cost-effective and meaningful tool for philanthropy a game-changer but it’s also “tax-smart”.
What is a Donor Advised Fund?
Think of a DAF as a charitable investment account. Here’s how it works:
Your clients –
- Contribute from a wide range of assets to iGiftFund. iGiftFund is a national, independent, public charity that sponsors DAFs.
- Enjoy immediate and highest tax benefits available (see below).
- Recommend you to manage the investments in their DAF. iGiftFund works on all investment platforms.
- Recommend grants to support their favorite charities on their own timeline. Because the income tax deduction is earned at the time of the contribution to the DAF – not when the grant is issued – DAFs take the pressure off of year-end giving decisions.
- Create and Pass on the Family Legacy: When clients use their DAF, they help their heirs learn about the responsibilities of inherited wealth and become successful, fiscally responsible and caring adults. By participating in this process, you are earning the loyalty of the next generation.
What Makes a DAF Tax Benefit Special?
Your clients –
- Enjoy the highest income tax benefits available: Gifts to a DAF receive a FMV valuation with the highest AGI deduction limits of 60% for cash and 30% for securities and other property.
- Avoid capital gains taxes when contributing long-term appreciated assets.
- Avoid estate tax on DAF assets. Assets contributed to a DAF are no longer in the donor’s estate. Removing assets from one’s estate could be important and attractive if tax laws revert in 2026 to the prior, much lower exclusion levels.
- Have more assets for grantmaking as DAF assets grow and compound tax-free.
- May enjoy a reduction in the Alternative Minimum Tax (Note: AMT rules are complex).
The Last-Minute Advantages:
Immediate Tax Deduction. Assets actually received by iGiftFund on or before December 31st count towards a client’s 2024 Tax Return.
Simplified record-keeping. For clients who are pressed for time, contributing to a DAF reduces the need for detailed gift receipts from multiple charitable organizations. One contribution to the DAF covers the immediate tax benefits, simplifying the end-of-year tax preparation.
Separates the giving from the grant-making. While the contribution must be received by year-end, grant recommendations can be made on the client’s flexible timetable. This allows for thoughtful, strategic giving without the rush, which can lead to more impactful philanthropy.
Set Up is simple and quick. Your client can set up the DAF on-line, quickly and easily. You control setting up the investment account for iGiftFund on your familiar platform.
Document the gift: iGiftFund will immediately send an acknowledgment to your client/donor as proof of the gift for tax purposes.
Final Takeaway
If you’re looking for last-minute planning solutions for clients that are simple, tax-smart and meaningful, recommending a DAF may be a timely and welcome opportunity. Not only does the DAF offer immediate and maximum tax benefits, it also sets the stage for enhancing and adding value to your client relationship.
As the year winds down, DAFs stand out as one of the most flexible and efficient tools for end-of-year financial planning, offering benefits that extend well beyond the immediate tax season.
What makes iGiftFund Different?
Fee Savings
At least 25% lower than other DAF Sponsors
FA Manages Assets
In open architecture, on any platform, any size fund
Experience
Longest in the DAF industry
Advanced IT Platform
Modern, efficient user experience on robust infrastructure
No Call Centers
Real People answer all calls for personalized service
Fund Options Beyond DAFs
Donor Restricted Funds tailored to a donor’s unique needs
(include: designated, field of interest, endowment & scholarship funds)
Truly Independent
No pools or products, focused on donor’s philanthropic interests
iGiftFund is an IRS recognized, independent, public charity, and Donor Advised Fund sponsor. Based in Hudson, Ohio, iGiftFund serves donors nationwide, and sets the industry standard of excellence. iGiftFund DAFs are more accessible, affordable, and philanthropically impactful through tax-smart, simple solutions. Our mission is to inspire donors through DAFS to build and share their charitable legacies, while educating their future generations on the value of philanthropy.
This content and its distribution are not intended to communicate tax, legal, or accounting advice. Please consult your tax, legal, and accounting professionals relative to this content.