Donor-Advised Funds

An important tax planning and charitable giving tool is the Donor-Advised Fund (DAF). There are hundreds of DAFs offered by non-profits, community and corporate foundations, and so on. Since DAFs are sponsored by 501(c)(3) non-profit organizations, donations:

  • are irrevocable
  • may be tax-deductible

However, DAFs are “donor-advised,” which means that donors may continue to direct:

  • investment decisions
  • grant recommendations
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Tax Benefits
Donors receive an income tax deduction when assets are donated into the DAF, but may continue to “advise” the DAF on investments and grants. Effectively, this means that donors can still direct how the assets are invested and granted.

Timing Benefits
The assets can remain in the DAF indefinitely before being granted out to the final 501(c)(3) non-profit. Thus, a donor can donate assets this year, but does not need to decide on the final non-profit recipient this year. The donor can decide where to direct the grant next year or in 10 years or beyond.

Other Benefits

  • Many DAFs can accept complex assets (such as real estate or business interests) that smaller non-profits are unable to handle.
  • If anonymity is desired, grants can simply be reported under the DAF and not from the original donor.
  • Once donated, assets can be sold without incurring capital gains tax and/or any future growth is tax-free.

A Flexible Solution
Investment considerations and tax planning often determine how and when to maximize the tax value of donations. However, these factors may not align with the charities that one supports. For instance, what if a charity is unable to accept stock options? Or perhaps a charity could use more recurring monthly donations rather than yet-another-lump-sum donation in December? A DAF is a great vehicle that can solve for these and other challenges.

Hurricane Irma Relief

Copyright: 2017 World Vision/photo by Eugene Lee

Copyright: 2017 World Vision/photo by Eugene Lee

Our thoughts are with those who are suffering in the aftermath of Hurricanes Harvey and Irma. The need for immediate aid and ongoing relief is clear, so we will be expanding our donation matching program to include donations made to:

  • Hurricane Irma relief, in addition to Hurricane Harvey relief.
  • World Vision, in addition to Direct Relief.

Put simply, Morling Financial Advisors will match 50% (up to $5,000 total) of client and employee donations made to Direct Relief or World Vision in September.
 
If you’d like to make a donation,

  1. Visit:
  2. Forward a copy of your donation receipt to anna[at]morlingadvisors.com.

Hurricane Harvey Relief

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Our thoughts and prayers are with those who are suffering in the aftermath of Hurricane Harvey. The need for immediate aid and ongoing relief is clear. In an effort to help, Morling Financial Advisors will match 50% of client and employee donations made to Direct Relief in September, up to $5,000 total.
 
If you’d like to make a donation,

  1. Visit Direct Relief’s donation page: https://secure.directrelief.org/site/Donation.
  2. Forward a copy of your donation receipt to anna[at]morlingadvisors.com

Below is some additional information about Direct Relief’s Hurricane Harvey relief efforts:

 
Reminder:

Our second Refugee Awareness Night, with Steve Haas from World Vision, is coming up next week!