Donor Advised Fund Growth
Submitted by American Endowment Foundation on November 18th, 2015
By Eric Kinaitis
A recent Wall Street Journal article highlighted what many financial advisors have seen first-hand: the interest in donor advised funds has continued to grow. One advisor referenced in the article mentioned donor advised funds are continuing to be popular because “clients are charitably minded but tax-conscious.”
Understanding the tax-saving power that donor advised funds (DAFs) provide is an often cited reason by many advisors as to why they recommend DAFs to their clientele. Regardless if the need is for an income tax deduction, concerns on capital gains, worries about estate taxes, or the fear of the AMT, donor advised funds have proven to be a tax-saving answer for many donors.
Another reason is ease. Compared to the time and expense that a private foundation or a charitable trust could entail, the ability to fill out a relatively simple DAF application is far easier. The fund can be opened and filled with assets in a matter of days.
In recent years, more and more financial advisors have become educated on the importance of charitable planning. After all, 95% of wealthy Americans are already donating to charity. Many planners achieved success in asking the right questions to their clients to better understand what they give to and why.
In recent months at American Endowment Foundation (AEF), new donors and their advisors have opened funds for some of the following reasons and with varying assets:
- A donor couple relied on their advisor to transfer a nearly $2 million existing DAF from another DAF administrator. The advisor was aware of some concerns that the donors had and was able to showcase why an AEF DAF was an optimal choice for their interests.
- Business owners who worked with an advisor to create a series of funds totaling over $1 million in value that were funded with general partnership interests.
- A donor who structured a life insurance policy that would fund future grant making out of their donor advised fund.
- A travel industry executive who used nearly 30,000 shares of his company stock to open his fund.
Unlike many other donor advised fund administrators, AEF always allows the financial advisor to continue to manage the charitable investments of their client. Regardless of the custodial platform or the dollar amount, AEF has always regarded the financial advisor as a trusted ally in helping clients achieve their charitable wishes.
Call us at 1-888-660-4508 or contact us to help you determine if a donor advised fund at AEF can be of service to you and your client.