Donor Advised Funds: A Quick & Easy Alternative to a Charitable Foundation
Let’s say you donate to a number of good causes each year. And have done so your whole life. But will your children and grandchildren carry on your legacy of philanthropy? How can you involve them in charitable giving? Some wealthy families use private foundations to involve children in giving. However, for families that may have less to give, a Donor Advised Fund will do the trick. Gather you family to share ideas, talk about what your family cares about and discuss how your donations might be allocated between various good causes might be rewarding. Even small children can participate. Children who participate in philanthropy often carry these habits and values with them throughout their lives.
There are some other benefits of using DAFs. For instance, are you the type of donor that gives to multiple charities throughout the years? If so, it can be difficult to keep track of it all. And where are all of those receipts at tax time? If you plan to donate even $5000 to charity, you can set up a Donor Advised Fund that will help you manage all your donations in one place. Using a DAF, you can use your tax write-off immediately, without having to decide when or where to disperse the funds until a future time.* Best of all, you can involve your whole family in a way that helps you carry on your values to future generations.
*American Endowment Foundation “Guide to Better Giving,” p.5