Thank you, Dean Catino, and U.S. News and World Report for the August 6, 2013 piece "Feeling Charitable? Use Donor Advised Funds" [Aug. 6, 2013] – a piece that ended with a buoyant "Charitable giving never felt so good!" We couldn’t agree more, and we wanted to point out some additional benefits to opening a Donor Advised Fund that go far beyond a tax deduction.
Articles about Donor Advised Funds (DAFs) have made a lot of news recently for their tax benefits, popularity and financial value thanks to a rebounding economy this year. All of this is great news, as it further evidences what we all know to be true: the philanthropic spirit is alive and thriving. At a time when governments across the world are spending less and looking for new ways to cut, the role of philanthropy and the charitable sector – funded by private money – will expand to help communities meet their needs.
This is particularly applicable to the more than 700 community foundations established in the United States that offer DAFs for people wanting to make grants to organizations and programs in their community where it is needed most. In fact, DAFs are wonderful vehicles for an individual to channel their philanthropic giving to projects and programs that benefit the community in which they live. Community foundations enable people to "give where they live" and to establish a fund that could benefit the community for years to come.
Professional staffs at community foundations help donors manage their funds in ways that see the money grow over time, allowing them to pay out much more than the original gift. Community foundations provide leadership and work with a wide variety of stakeholders, like schools, non-profits, and residents, to understand where a gift can make the most strategic impact.
Community foundations can also leverage the funds in the DAFs of other donors who share a common interest in a specific issue, like child health or adult learning. This allows one individual to combine forces – so to speak – with others and have a greater impact on a shared cause. In addition to all of the tax benefits, when donors open DAFs at their community foundations, they are able to give where they live (and beyond), and through leverage they are able to do more for those in their communities who most need the help.
The most significant and often underappreciated benefit to opening a DAF is realized when a child goes to school well-fed, when a teen meets their potential by getting to college, when a veteran gets retrained and employed and when a community benefits from better living through a culture of opportunity. DAFs advance the common good by empowering people to give back, and they allow for generosity and advancement that wouldn’t be possible otherwise.
At the Council on Foundations, our membership of grantmaking foundations and programs is heartened by the growth and popularization of any and all charitable vehicles that promote philanthropic giving. Charitable giving, through any financial vehicle or donation, is much more than just a tax deduction.
Vikki N. Spruill
President and CEO
Council on Foundations