Donor Advised Fund (DAF)
Donor advised funds are an excellent vehicle for donors to be able to distribute charitable dollars over time.
Create a lasting legacy by involving family members as successor advisors or naming the fund as a beneficiary in your estate plans, ensuring your charitable impact continues beyond your lifetime.
Donor Advised Fund (DAF) Overview
Benefits of a donor advised fund
- Establish a flexible vehicle for annual charitable giving
- Benefit from a more tax and cost efficient alternative to a private foundation
- Receive an estate tax deduction and savings from your gift
- Obtain a charitable income tax deduction in the year of your gift
What is a donor advised fund (DAF)?
A donor advised fund is a way to simplify your giving by opening a fund at the Vermont Community Foundation that can distribute gifts to the charities of your choice during your lifetime and establish a succession plan to carry forward your charitable legacy after you are gone.
How a donor advised fund works
- You make an initial, irrevocable gift of cash or stock to fund a DAF at Vermont Community Foundation.
- The assets in your DAF grow tax-free.
- You make annual recommendations on gifts to be made from your DAF.
- When you pass away, your children may recommend charitable gifts from your DAF or you may name the fund as a beneficiary in your estate plans.
More on donor advised funds
A donor advised fund has several advantages when compared to a private foundation. The start-up time and cost are minimal for DAFs, and gifts to DAFs are generally deductible at fair market value. A DAF is also not subject to the distribution requirements and certain excise taxes faced by private foundations.
