HOW A DONOR-ADVISED FUND WORKS

Donors contribute to a fund (DAF) held by a 501(c)(3) sponsoring organization and receive an immediate tax benefit. Over time, donors recommend grants from the fund to their favorite charities. Donors can establish a DAF, often with advice from or with the help of their financial advisor, accountant, or estate attorney. After that, donors can make charitable contributions to their DAF, receive an immediate tax benefit, and recommend grants from the DAF to the Humane Society of Truckee-Tahoe on whatever schedule or timeline they choose.

HOW DONOR-ADVISED FUNDS CAN WORK FOR YOU

• DAF sponsors are public charities, which means contributions to them receive the most favorable tax treatment under the Internal Revenue Code.
• DAFs can be established with limited paperwork or online in minutes.
• As a general rule, DAFs are easier to run, easier to use, and more accessible than private foundations; some can be created for as little as $5,000.
• Assets in DAFs can be invested, and any growth is tax-free. This means that more money is generated for charity.
• A DAF can facilitate the liquidation of complex appreciated assets such as stocks, real estate, mutual funds, and annuities so that the donor can make cash grants to charities.
• DAFs offer succession planning options, allowing a donor’s family to be grant advisors for unlimited generations and creating a charitable legacy.
• Grants through a DAF can be made anonymously.