Overview
Donor advised funds (DAF) are the fastest growing charitable giving vehicle in the United States. More and more donors are choosing to maximize their charitable impact through this type of fund, which offers a hands-on approach to your philanthropy and grows tax-free for future giving.
Once your fund is set up through the Catholic Foundation, contributions can be made at any time, in any amount. Similarly, you can recommend grants from your fund at any time, in an amount of your choosing, to your favorite charities.
How Does it Work?
1. Give
You set up a fund through the Catholic Foundation which creates an immediate tax benefit for you.
2. Grow
Your money in the fund grows tax-free through socially-responsible investments.
3. Grant
From this fund, you can still give your monthly, quarterly, and annual gifts. Through a simple process, you direct your giving from your fund to the Catholic charity of your choice, and the Foundation manages the paperwork for you.
4. Transform
We’ll even work with you to consolidate your giving so it has a bigger impact.
What are the Benefits?
- Flexibility in where and when you make your donations: Receive a charitable tax deduction when you make a contribution to a DAF and make decisions about which charities to support at a later date.
- You no longer need to track receipts: The Catholic Foundation will provide you with a tax receipt for your contribution, so you no longer need to keep track of receipts from multiple charities.
- Easy to use: Manage your giving through one convenient account and we’ll handle the paperwork. Fundholders have online access to the DAF where you can see the fund balance, contribution history, investment performance, and recommend grants at your convenience.
- Grow your charitable dollars: The assets in your fund can grow tax-free. Your gift is invested in a socially-responsible portfolio aligned with our Catholic faith, generating more charitable dollars for greater impact.
- Increased privacy and confidentiality: A donor advised fund is not required to publicly disclose the grant making activities of individual Fundholders. Also, grants may be made anonymously.
- Gift a variety of assets: You can contribute cash, securities, mutual funds, real estate, and business interests. This tax savvy vehicle is ideal for those using a “bundling” strategy and/or selling appreciated assets.
- Options down the road: Choose successor advisors, make one-time legacy grants to charities of your choice, create an endowment, or leave the residuary to the Catholic Foundation upon your passing.
With a low barrier to entry, immediate tax benefits, and the ability to create charitable impact, DAFs are a great vehicle to support your philanthropic and financial goals.
“We can continue to support those individual causes which are important to us, but in a more streamlined way and with a better plan in place. And, more importantly, it will continue to be carried forward beyond our lifetime.”
– Patrick Mullally｜DAF Fundholder
Should I Consider a Donor Advised Fund Instead of a Private Foundation?
We know you have choices to achieve your family’s charitable goals. Are you wondering if a donor advised fund is right for your charitable giving needs? See a comparison between a donor advised fund and starting a private foundation.
Donor Advised Funds FAQs
About Donor Advised Funds
What is the difference between a donor advised fund and an endowment?
An endowment fund provides a source of annual income to a Catholic organization or cause of your choice. The endowment is designed to function in perpetuity, making it possible for you to ensure long-term financial support to your chosen cause. A donor advised fund offers a hands-on approach to philanthropy. The fund invests your charitable gift to grow tax-free for future giving. With a donor advised fund, you advise which organizations you would like to be grant recipients.
What happens to the DAF when I die?
You can choose successor advisors to continue the fund’s administration beyond your lifetime, make one-time legacy grants to charities of your choice, create an endowment (or several) upon your passing, or leave the residuary to the Catholic Foundation.
Granting from your DAF
Can I request grants payable over more than one year?
Yes. The Foundation can honor a request that the distribution be made in increments in the amounts and at the times you specify.
Can my children participate as advisors to the fund(s) I have established?
Yes. When you establish your fund, you will name the advisors – usually your self and your spouse, and if you choose, your adult children. Many donors find their donor advised funds to be helpful tools for teaching philanthropy to their children. You can also stipulate that your children serve as advisors to the fund after your death, so as to retain your family’s participation for an additional generation.
Can I grant to non-Catholic causes?
Yes, so long as the public charity is in good standing with the IRS and its work aligns with the mission and teachings of the Roman Catholic Church.
DAF Granting Restrictions
Can grants be made to individuals?
No. Only 501(c)(3) organizations are eligible.
Can I use the resources of my donor advised fund to pay off a multi-year pledge to an organization’s capital campaign?
No. The Catholic Foundation cannot make grants to satisfy pledges you have made to any charity. This is because, in accordance with the IRS, when you make a contribution to a Donor Advised Fund at the Catholic Foundation you are entitled to take the full amount as a tax deduction, as you have received nothing material in return for your investment. If, however, the Foundation satisfies your pledge, you will be receiving something in return for your contribution – release from an obligation. The Foundation can make grants of certain amounts over a number of years, but not in fulfillment of any pledge or other obligation. If you have a donor advised fund, you should not sign a pledge card without first discussing your charitable commitment and wishes with a Foundation professional.
What other kinds of charitable gifts cannot be distributed by the Foundation from a donor advised fund?
Membership fees and dues, and tickets for seats or tables at charitable events are precluded from payment by the Foundation, as are contributions to political campaigns and lobbyists.
DAF Grant Recognition
Do I get credit for grants I recommend from my fund(s) at the Foundation?
When The Catholic Foundation makes a distribution, the recipient is notified that the grant has been made from your specific fund through the Catholic Foundation. Acknowledgements are generally sent both to the Foundation and to you – to let you know that a gift was received and appreciated. The tax receipt, however, will be sent only to the Foundation, as you are not entitled to any further tax deductions, having realized the tax benefits when you established or contributed to your fund at the Foundation.
Is it possible for grants from the Foundation to be made anonymously?
Yes. Many Catholic Foundation donors choose anonymity. Simply request that neither the name of the donor nor the name of the fund be released.
DAF Investments
How will the money in my fund(s) be invested?
Donor Advised fundholders can choose from four different investment pools, all of which align with our Catholic values. We work with professional investment advisors to achieve a competitive return consistent with board policies regarding risk and return. Investment performance is available daily through the fundholder’s donor portal.
How much control will I have over any charitable fund(s) I establish at the Foundation?
Legally, once you have made a contribution to the Catholic Foundation to establish a fund and receive the tax benefit, the assets become property of the Foundation. At the same time, however, the Foundation makes a commitment to honor your personal philanthropic intention throughout your lifetime and, should you choose, in perpetuity. Donors retain fund advisory privileges that inform grant recommendations and investment strategy (within Board policy) and the Foundation makes every effort to honor that recommendation in its decision-making. We encourage on-going communication between all donors and the Foundation so that we can help you to realize your unique charitable vision.