4 Top Benefits of Donor Advised Fund Offering

Between 2016 and 2018, Canada’s donor-advised funds increased by 13.8% annually, reaching $6 billion from $4.4 billion. And according to research, the number of donor-advised funds established at various foundations increased by 35% during the two years, as did donations to new and existing funds. Donor-advised funds in Canada are now gaining traction in philanthropy, and for all the right reasons.

With a donor-advised fund, it is possible to give to charity all year long. It is a more organized method of donating that’s been gaining traction among contributors, while most of these funds are financed by contributions of valued stocks or cash as charitable accounts. As such, it’s crucial to remember that you give up control of the assets when you donate to a donor-advised fund. So make sure you only invest in assets that you wish to give up and can manage to do so.

Explored below are the advantages of donating via DAFs:

1. Provide Your Donations With the Chance to Grow

In keeping with your philanthropic intentions, a DAF maintains funds invested in your charitable giving account while you decide which charities will get donations and what the amounts are. As such, portfolios are tailored to your objectives and time horizons, and you may choose between sustainable, actively managed, and passive portfolios. This customization, together with competent asset management, may allow your donations to grow without incurring capital gains taxes, possibly increasing the total philanthropic effect of your gift.

2. Provide Immediate Tax Advantages At Market Rates

You invest a lump sum into a donor-advised fund, and the fund distributes money to the organizations of your choice at your leisure. This allows you to take advantage of quick, market-rate philanthropic deductions while also making long-term gifts to your chosen charity. You can also carry over any unused charitable income tax deduction for up to five years, and the fund’s assets can eventually become tax-free, boosting your impact.

3. Time & Effort Saving

Rather than performing “checkbook philanthropy” by providing gifts to different charities and receiving receipts from each, you can save time and money using a DAF. The digital capabilities of the present day and age are outstanding, and your account may be easily and securely maintained online. You could also use a bank’s secure website to set up one-time or regular grants. And the firm handles all administrative chores, including regulatory reporting, saving you time and effort.

4. Convenient

Donor-advised funds in Canada are created to fulfill the requirements of a diverse group of people. And some donors need assistance deciding how to best make a philanthropic impact. In contrast, others know precisely which charity they want to support, the amount they want to contribute, and when they want to donate. As such, the large database may be a resource for locating addresses or other contact information for these contributors.

A DAF allows you to reveal your selected nonprofit name or remain anonymous, depending on how essential anonymity and privacy are to you. As such, giving through a donor-advised fund is an excellent and effective option. In exchange, you will receive appreciation from the NGOs you support and the personal gratification of understanding that your gifts are creating an impact in the larger community. So considering the ease and reliability of donor-advised funding, it’s time you seriously give it a thought and make better use of your resources.