Using Donor-Advised Funds-Slide handout

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Pdf Summary

The NAPFA Webinar, presented on October 2024 by Daniel Blake, CEO, focuses on the importance of charitable giving strategies, specifically Donor-Advised Funds (DAFs), for financial advisors. The webinar highlights that firms offering charitable planning see significant benefits, including 6x the median assets and 3x the median organic growth compared to those that don't.<br /><br />A Donor-Advised Fund (DAF) is a giving account established for future charitable contributions. Donors can make a charitable contribution, receive an immediate tax deduction, and make charitable grants over time. The DAF provides flexibility in asset contributions, management, and better giving opportunities, including donations, grants, loans, and ability to make impact investments both domestically and internationally.<br /><br />Comparatively, DAFs have several advantages over Private Foundations including immediate setup with low fees, higher tax benefits (e.g., cash donations up to 60% AGI deductibility), no required distributions, and the possibility of anonymous contributions.<br /><br />The webinar introduces charitable bunching as a strategy, where donors front-load multiple years of charitable contributions to a DAF in one tax year, maximizing itemized deductions and taking the standard deduction in subsequent years. This strategy can significantly increase tax savings, as demonstrated in the case study where a married couple optimized their charitable deductions over five years.<br /><br />Additionally, the benefits of donating a private business prior to sale are discussed, highlighting tax savings by avoiding capital gains tax and obtaining an income tax deduction. A case study illustrates how a family selling a $10 million business avoided capital gains tax and received substantial tax deductions by contributing part of the business equity to their DAF.<br /><br />The webinar emphasizes discussing DAFs during key financial planning moments, such as annual reviews, high-income years, business sales, and estate planning, offering advisors a structured approach to integrating charitable giving into client strategies.

Keywords

NAPFA Webinar

Daniel Blake

charitable giving

Donor-Advised Funds

financial advisors

charitable planning

tax deduction

charitable bunching

private business donation

estate planning