Giving to charity should be fun, easy and efficient. Many donors choose donor advised funds (DAFs) as a flexible and efficient way to organize charitable giving.
Maximize Your Giving
Donor advised funds (DAFs) are both a flexible and efficient way to organize your charitable giving.
These charitable accounts empower you to give as often as you wish to the nonprofits you care about. What better way for nonprofits to benefit from these timely gifts! Choose a name, fund the account and let this be your personal vehicle to support community efforts that align with your values, goals and charitable vision.
What is a donor advised fund?
A donor advised fund is a smart, simple, flexible and convenient way to give.
When you establish a DAF with the Saint Paul & Minnesota Foundation, you can fund the account with cash, stocks or other assets such as real estate. These gifts are generally tax-deductible at the time of the contribution and are invested to grow over time, while you recommend grants from the fund to your favorite charities.
What are the benefits of a DAF?
Opening and contributing to a fund: A DAF has no start-up cost for the donor. You can contribute a wide range of assets including cash, and non-cash assets such as stock, mutual funds, real estate and cryptocurrency to open your fund. Gifts to a DAF are generally tax-deductible at the time of the contribution or may have other tax advantages.
Making grants to your favorite charities: Once a fund is established, you can recommend grants to qualified nonprofits at any time. By partnering with a community foundation for your charitable giving, you can hand off administrative, investment management and fiduciary responsibilities. You also may remain anonymous for some or all grants, if you prefer.
Creating a legacy of giving for the next generation: In addition, DAFs provide a means to engage multiple generations of your family in being community minded. You can name children or grandchildren as successor advisors on your fund to carry your giving legacy beyond your lifetime.
Watch the video to learn about more benefits of starting your own donor advised fund.
Giving to causes you care about is an important way to invest in the vitality and future of your community.
While there are many ways to fulfill your charitable vision, a donor advised fund, also called a DAF, is a smart, simple, flexible and convenient way to give.
A donor advised fund is an easy way to give to the charities you care about. A DAF with the Saint Paul & Minnesota Foundation allows you to set aside money for charitable giving, receive a potential tax deduction the year you give to the fund and use our online portal to recommend grants to your favorite nonprofits over time.
A DAF has many benefits. First of all, because you potentially get a tax deduction when you open your fund, you don't have to track receipts as you make gifts to multiple organizations even if your giving continues over several years. Second, you can fund a DAF in many ways including through donations of cash, stock or other assets like real estate, or farm equipment. Giving appreciated assets may also have significant tax advantages, and donor advised funds can be the gift that keeps on giving. DAFs are a great way to engage multiple generations of your family in being community and charitably minded.
Opening a donor advised fund with the Saint Paul & Minnesota Foundation offers additional benefits. At the Saint Paul & Minnesota Foundation, we make giving through a donor-advised fund efficient and effective. Not to mention convenient. We are here to support your interest whatever they may be, because we are about relationships, not transactions.
When you work with us, you will have a dedicated philanthropic advisor as your giving partner. Access to special donor events that provide an opportunity to hear about timely topics impacting your community. And if you'd like, recommendations about which organizations and community needs align with your values. In short, we are here to help you maximize the impact of your philanthropy and to take care of the details while you focus on giving.
The Saint Paul & Minnesota Foundation. Where giving grows.
Learn more about starting your own donor advised fund with us today.
Is there a minimum amount to open a donor advised fund?
In the U.S., the size of individual DAF accounts vary greatly. The minimum gift to establish a donor advised fund with the Saint Paul & Minnesota Foundation is $10,000 — and we accept many types of cash or non-cash assets to start and grow your fund.
If you’re interested in opening a fund with more than $250,000 and would like your professional advisor to manage its investments, you may be interested in our Individually Managed Fund option. Give us a call at 651.224.5463 to learn more.
A donor advised fund
with the Saint Paul & Minnesota Foundation offers key advantages:
Receive a potential tax deduction the year you give to your fund and then decide how to direct the funds at your discretion.
You focus on giving — we handle all the accounting, legal and investment services.
You are matched with a philanthropic advisor who will partner with you to help maximize your giving through their expertise and knowledge of the community.
Know that your charitable dollars are wisely invested and grow tax-free, allowing more nonprofits to continue to benefit from your generosity.
Melanie, Foundation donor since 2016
Melanie K. has been donating to environmental organizations, causes and issues she cares about since college. In an effort to amplify her giving, the mother of two set up a donor advised fund with the Saint Paul & Minnesota Foundation in 2016. She had just sold a business, and her fund provided her family with financial and charitable benefits. Through her donor advised fund, Melanie continues to give back to nature.
You Have Many Gift Options
You may wonder what types of assets can be used to open your DAF. You may be surprised to find out that you can turn real estate, stock or your retirement assets into a charitable gift — and make a bigger impact than you ever thought possible! Many options can even provide income during your lifetime or significant tax benefits — or both. Our experienced team can help you determine the best type of gift for your personal situation.
Ready to Start Your Fund?
You have three ways to start your donor advised fund:
Give our experienced gift planners a call at 651.224.5463. We can talk through any questions you have.
The Difference between a DAF and a Private Foundation
A donor advised fund has some similarities with having your own foundation — and some important differences.
A DAF offers you a flexible and easy-to-establish vehicle for charitable giving and is relatively inexpensive to administer. With a DAF, the administration, investment management and fiduciary responsibility are fulfilled by our community foundation.
Private foundations allow for greater control of assets by the donor. Private foundations are separate nonprofit corporations or trusts, and must apply for tax-exempt status from the IRS, file annual tax returns and meet minimum payout requirements.
Whether you choose to establish a donor advised fund, private family foundation or both, we can provide the tools and support you need. Working in close partnership with your professional advisor, our team can help determine which option works best for you. Together, we can create a giving plan that fulfills your charitable aims — now and in the future.
How to Make a Donor Advised Fund Part of Your Estate Plan
If a DAF isn’t already part of your estate, here’s why it should be. When you leave a DAF in your estate plan, it can often financially benefit both you and the organizations you choose to support, by providing you income or significant tax benefits during your lifetime and maximizing the amount you are able to give.
A donor advised fund usually lasts until funds are depleted. If you already have a DAF, when you pass, those assets can be allocated to a designated fund, unrestricted fund or restricted fund. (See all fund types.)
You can also appoint family members or friends to be successor advisors. After your passing, the Foundation will work with your designated advisors to continue making grants from your fund until the last listed advisor on the fund dies.
This allows for the fund to continue carrying on your philanthropic mission.
A DAF can also be named as a beneficiary in your estate plan through your will, life insurance or charitable remainder trust.
“ Working with the Foundation has given us the opportunity to give these gifts during our lifetime. As funds go, it's a modest amount of money, but we've done extraordinary things with it because of the help and great care the donor advised fund has had with the Foundation.”
David and Janet, Foundation Fundholders since 2013
Gift Bunching Explained
With a technique known as gift bunching, you can maintain your charitable impact while maximizing your potential tax benefits. Our Senior Vice President of Philanthropic Services, Jeremy Wells, explains the advantages of gift bunching in this video.
In the example in the video, a donor clusters - or bunches - three years’ worth of charitable giving in one year to their donor advised fund and takes the charitable deduction on their taxes. They then make grants out of their DAF to the community causes they support over time. The donor takes the standard deduction in those off years where they aren’t bunching their gifts.
So over the last couple of years there's been a lot of conversation around gift bunching or charitable gift bunching and because of the new charitable tax law and the fact that not as many people will be itemizing on their taxes, there is less incentive for some people to maybe make charitable contributions.
For those that want to continue to support nonprofits, causes they care about in community on an annual basis, donor advised funds can actually be a wonderful resource to do that through a bunching technique. In essence, an individual might cluster three years' worth of philanthropy in one year, take that charitable deduction, in essence bunch their contributions in that first year, and then make gifts in subsequent years, make grants out of their donor advised funds to the community. So the nonprofits don't feel that difference, but they can take the standard deduction those off years where they aren't bunching their gifts and then again bunch a few years of philanthropy together to take that charitable deduction.
So it's a strategy we've seen begin to play out over the last couple of years, and we think more and more individuals are likely going to consider donor advised funds as an opportunity to continue to create that stable philanthropic impact in community that nonprofits need while at the same point in time leveraging some of the new tax law as well.Learn More