Donor Advised Funds
A Donor Advised Fund (DAF) with Redlands Community Foundation provides a flexible and simple way to manage your charitable giving. By establishing or contributing to your DAF, you may qualify for a big tax deduction for the current year (check with your tax advisor) and then your actual donations to multiple charities can be staggered over several years.
What is a Donor Advised Fund (DAF)?
A DAF lets you make a tax-deductible contribution now and retain the ability to direct the distribution of the funds in the future.
You create an account in your name (or that of your family). Thereafter, you advise the foundation to make grants from your account to charities of your choice. A DAF is similar to a private foundation, but it is easier to manage and is free of many IRS restrictions.
Donor Advised Funds Are:
Deductible: An immediate income tax deduction. Contributions of appreciated capital assets will avoid the capital gains tax.
Flexible: A DAF separates the timing of a tax deduction from charitable support decisions so you have time to decide how to direct your giving.
Simple: Creating a DAF is very easy to do. You fill out a simple and brief application available to download at our website.
Versatile: You can give a variety of assets into a DAF: cash, securities, real estate, business interests, etc. Non-cash gifts of assets can provide the most tax leverage.
Legacy: The DAF can ensure your legacy continues after your death through instructions he or she leaves with the DAF or with his or her successor heirs.
Cash and appreciated securities are the most common assets contributed to a DAF. However, there may be more strategic assets to donate that can maximize your tax savings and allow you to give more than you thought possible.
Gifts of assets from net worth allow you to be a more effective donor without adversely affecting your cash flow or lifestyle needs (in many instances the tax savings will increase your cash flow). You can give:
Appreciated Securities: Publicly traded stocks, bonds, mutual funds, etc.
Real estate: Land, rental property, residential, farm, or other properties.
Life insurance: Whole, universal, or variable.
Estate gifts: Proceeds from wills, trusts, retirement plans, or life insurance policies.
Year-End Tax Planning: The DAF can be helpful when there are time constraints, e.g., as the end of a tax year approaches, you may not have enough time to decide on charities and projects , but you know you need a tax deduction before December 31st.
Creating a Donor Advised Fund at the Redlands Community Foundation is a simple process. Our staff will work with you to create a fund agreement that will name your fund, assign advisors, and help establish your giving intentions.
You can make tax-deductible gifts of cash and securities to your fund as soon as it is established. You can make additional contributions to your fund at any time.
Once you’ve made a contribution to your fund, you are ready to begin recommending grants. Grant recommendations can be submitted using the disbursement form provided when you established your Donor Advised Fund. It can be remitted to RCF via email, or U.S. mail. Grants can be made to local, national, or international charitable organizations. Our staff will always conduct due diligence to make sure the organization is qualified to receive a tax-deductible gift. A grant check will be issued from your fund and mailed to the recipient organization, accompanied by a cover letter describing any details related to the grant.