Nothing should stand in the way of having a savings account for giving.
Many of us give throughout the year to various charitable organizations. We all give in different ways — some through hands-on service, others through skills developed from experiences in other parts of life, some through financial means acquired or inherited and some via all of the above.
With all we have going on in our lives, giving needs to be easy. Opening up and using a donor advised fund (DAF) is a great way to simplify the process. It is a versatile tool that works for a broad array of individuals. It meets many needs and at a relatively low cost. It is also the fastest-growing charitable giving vehicle in the U.S., DAFs operate as savings accounts for money you plan to give to charity.
Here’s how it works: You allocate the funds you wish to donate, put them into the DAF of your choice, then decide which charities you’d like to give to. In the meantime, the funds are invested so the money can grow tax-free. It’s that easy.
Another plus? You receive an immediate tax deduction when you contribute to your account. Plus, you have more control over your giving, since DAFs allow you to make recommendations to your advisor regarding what to give to your favorite charities over time.
With double impact donor advised funds, your money is invested based on your charitable values, doing more good with the same dollars.
Donor advised funds can be a better option than giving to the charity of your choice directly, because they provide anonymity, allow time to decide which charities to give to while still collecting a tax deduction (and allowing the money to grow tax-free), and can be a valuable teaching tool for children and other family members on the importance of giving.
Want even more impact? Consider a double impact DAF, which works in a similar way as a traditional DAF, except that when the money is invested, it’s invested based on your charitable values, doing more good with the same dollars.
This means that if the environment and clean water are important values to you, your double impact DAF advisor will invest your account in companies or other investment instruments with values consistent with yours.
For example, let’s say Ivy cares about these same values. Ivy meets with a double impact DAF advisor and explains this. She opens an account, and names it the Enlighten Fund.
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She contributes $25,000, money she plans to give away to five charities later. Based on her values, her double impact DAF advisor recommends investing her $25,000 in clean water companies and environmentally responsible mutual funds, some of which are fossil fuel-free.
Once she decides on her gifts, Ivy contacts her advisor, who sends gifts from her account to the charities she recommends. As a result, Ivy is happy because she has created, invested, and given all in a way that is consistent with her values.
Triskeles Foundation, based in Exton, is a national donor advised fund provider with over 15 years of experience aligning individuals and nonprofits values with their philanthropic interests.