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Your Charitable Giving Options

Don’t run out of time to make tax-deductible charitable contributions in 2023. Contact us now to learn about your options!

Make the greatest impact

The purpose of your life can be fulfilled through supporting the charitable causes you care about. With a donor-advised fund or private family foundation, your donations have the potential to grow tax-free before you recommend grants to your favorite charities. With the help of Endowment Wealth Management and the utilization of the Endowment Investment Philosophy®, you can ensure a lasting legacy.

 

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Donor Advised Fund or Private Foundation?

A Donor Advised Fund (DAF) is a giving account used to support public charities. An individual makes an irrevocable gift to the DAF and then recommends charities as grant recipients.

A Private Foundation is a charitable vehicle that is created by an individual, family or business. It is managed by its own directors or trustees and makes grants to nonprofit organizations and individuals.

Donor-Advised Fund

Low Minimum Initial Funding

Since a DAF is an account, and set-up and administrative expenses are minimal, the minimum initial funding is comparatively lower.

Private Foundation

Higher Minimum Initial Funding

Since a private foundation is a stand-alone entity, and the fees associated with creating an independent charitable organization are more, setting up a foundation at a higher funding level makes sense.

Less Control over Grants

Technically, a donor recommends organizations to receive funding. The administrator of a DAF is not obligated to follow these recommendations.

Complete Control over Grants

In contrast to a DAF, the members of a private foundation have direct control over the grants made by the foundation.

Limited Granting Options

The IRS limits the types of charities a DAF may grant to, typically 501(c)(3) public charities.

Broad Array of Philanthropic Options

In addition to public charities, a private foundation can make grants to any nonprofit organization, to individuals and families in need, to international organizations, and even to for-profit entities when those funds are used for a charitable purpose. Private foundations can also run their own charitable programs.

Fewer Investment Options

DAF donors typically must choose from a standardized selection of mutual funds or a limited menu of proprietary, pooled investment options. DAFs may offer the flexibility of separately managed investment accounts to donors with accounts over a certain size.

Wide Investment Options

A private foundation can be funded with, and continue to hold, a wide array of assets. In addition to cash, cash equivalents and publicly traded securities, these can include alternative assets, tangible property such as art and jewelry, intellectual property and real estate.

Tangible Assets

Contributions of tangible assets to a DAF can be deducted at fair market value, but these assets will be liquidated after receipt, sometimes incurring an additional fee.

Tangible Assets

Contributions of tangible assets to a private foundation will be deductible based on cost basis, but they can continue to be held within the foundation. If they fulfill a charitable purpose, they will be excluded when calculating the foundation's annual distribution requirement.

No Annual Distribution Requirement

Currently, there is no annual distribution requirement for a DAF.

5% Annual Distribution Requirement

The IRS requires private foundations to distribute at least 5% of their assets annually, based on the previous year's net average assets.

Higher Income Tax Deductions as a % of AGI

A DAF lets you take a current-year income tax deduction for your charitable contributions, then make grants over a period of years. A donor is able to deduct up to 60% of adjusted gross income (AGI) for all-cash donations and up to 30% for appreciated assets. Contributions that mix cash and securities are capped at 50%.

Lower Income Tax Deductions as a % of AGI

Like a DAF, a private foundation lets you take a current-year income tax deduction for your charitable contributions for grants that are made in the future. A donor can deduct up to 30% of adjusted gross income (AGI) for cash donations and up to 20% for appreciated assets. Note: there is five-year carry forward for donations that exceed these limits. Also, in any single year, a donor can max out the deduction to the foundation and make additional contributions to one or more public charities, including a donor-advised fund, to capture the higher limits.

Option for Absolute Anonymity

Donors can choose to be named in the disbursement letter that accompanies the grant check or remain anonymous. Note: the grant check itself will be in the name of the parent organization not the individual account.

Limited Anonymity

Donors can choose whether the grant check and accompanying disbursement letter include the foundation's name or not. However, all grant recipients will be disclosed on the foundation's annual 990-PF filing to the IRS.

Our Professional Partners

Donor Advised Funds & Philanthropy 101

Endowment Wealth Management has selected Fidelity Charitable to provide support services for our clients who have Donor Advised Funds (DAFs) and those who are thinking about starting one.

Learn about the different ways to give and discover how to make your giving more impactful and satisfying.

Philanthropy 101

Private Foundation Services & Resource Library

Endowment Wealth Management has selected Foundation Source to provide support services for our clients who have private foundations and those who are thinking about starting one. Services include foundation creation (when needed), foundation administration, active compliance monitoring, philanthropic advisory, tax and legal expertise, and online foundation management tools. Endowment Wealth Management manages the foundations’ assets.

In addition, Foundation Source has authored an extensive library of specialized content related to private foundations, from the basics to advanced grantmaking techniques. This content is available to all Endowment Wealth Management clients.

Foundation Source Announces New Strategic Alliance with Endowment Wealth Management

Foundation Source Resource Library

Next Steps

Our philanthropic solutions can simplify your giving, provide significant tax advantages, diversify your fund through the Endowment Investment Philosophy® and help you give more to the causes you care about.

Step one is to schedule your free family wealth consultation where we will review your current family situation and determine which charitable option fits best in your overall Family Wealth Plan.

We guide you through the entire process – making it seamless and simple.

  • Call us at 920-785-6010, or
  • Click the button below to schedule an appointment with one of our elite wealth advisors.
Schedule Free Consultation

The information on this page is for informational purposes only and should not be considered personalized investment or tax advice.  Investing involves risks, including, but not limited to long-term investing risk and potential loss of capital.  Endowment Wealth Management is not making any specific recommendations that investors should or should not participate in investments.  Investors should always consult with a registered investment adviser and tax accountant to determine if any particular investment and its corresponding tax impact is appropriate for their personal circumstances. Not insured. Not Guaranteed. May Lose Money.