DAF: A First Step to Family Philanthropy

A donor advised fund (philanthropic fund) is a named fund of the Jewish Federation of Cleveland in which you as the donor advisor make recommendations for charitable grants from the fund.

The Federation’s Donor Advised Fund program was established to provide donors with an easy tool for charitable giving that has additional benefits such as tax savings and accurate record keeping. Less known, but equally important, is that a donor advised fund can also be the first step toward intergenerational philanthropic planning.

Many donors use the fund to include family members in the charitable discussion, demonstrating to them their personal values and the importance of philanthropy. Some donors allow their children to recommend grants of a certain amount each year, and others gather at holiday dinners to make philanthropic choices together. Either way, the fund is a wonderful catalyst for family philanthropy.

Regarding estate planning, donor advisors can recommend that the fund’s assets be granted to specific charities upon their deaths or they may allow the fund to support the Federation’s Endowment Fund in perpetuity. Donors may also leave bequests to their funds, giving their heirs the privilege to make grant recommendations of their own choice or continue to support the charities of the original donor.

Donor advised funds provide an excellent tool for current giving, but they are also an effective first step to creating a meaningful philanthropic plan that benefits both the donor and the community.

Donor Advised Fund Benefits

• Income is earned on all donations to the fund
• All income generated by the fund is tax-free
• An immediate tax deduction is earned for the amount of the initial gift
• May be used to create endowments in perpetuity

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