Giving with a Donor Advised Fund
Donor Advised Funds (DAFs) can help donors build their legacy over the course of their lifetime, helping to create a culture of intentional philanthropy that leads both to higher levels of giving and increased impact.
A DAF is essentially a vehicle for giving that houses multiple charitable trusts under one master trust. This allows individuals to avail of all the benefits of a charitable trust (tax, anonymity, etc.) and at the same time not have the burdens of having a charitable trust, (governance and administrative).
Rachel Steeden, Head of Legal at Stewardship, comments: "We find that many of our donors view legacy giving as a natural extension of their lifetime philanthropy. Many donors have much of their wealth tied up in their home or business, so giving in their will is a key opportunity to make a transformative gift in support of their favourite cause. We proactively ask our (U)HNW donors about legacy giving and ensure that Expressions of Wishes are regularly reviewed to confirm they still reflect the donors’ intentions.”
Here we look at some examples:
Example A
A couple opened a DAF account in 2012. They built their account balance by choosing to make significant gifts on a couple of occasions when they sold some of their land. They are very active donors who request regular allocations to a number of different causes within the areas they care most about.
They have also stipulated in their Will that 90% of their estate is to be given to their DAF account. They have indicated via their Expression of Wishes how they would like the amount to be allocated in terms of general causes eg. evangelism and justice, but are happy to leave the selection of recipients within those causes to the DAF provider.
These are a brilliant example of donors who are committed to lifetime legacy building, enjoying seeing the impact of their philanthropy now but who are also benefiting from knowing they have ensured the longevity of that impact through the legacy they have set up in their Will.
From these examples we can see how blended giving is increasingly an option, what is also important to note is that the DAF provider will have the discretion to choose which charity to allocate the funds to, highlighting the importance of cultivating relationships with DAF providers.
Example B
This couple transferred their charitable fund to a Donor Advised Fund account in 2020. They haven’t currently included the DAF in their Will, but have already built a balance of nearly £300,000 in their account and have completed an Expression of Wishes to indicate how they would like the balance to be allocated after their death.