Donor-Advised Funds: A Strategic Tool for Philanth

Outline 1. Introduction • Presenter: Daniel Blake, CEO, UI Charitable Advisors • Topic: Donor-Advised Funds (DAF) • Date: May 2025 2. Learning Objectives • Understand what a Donor-Advised Fund (DAF) is and how it works • Implement specific strategies to properly utilize a DAF • Learn how to be strategic about philanthropy 3. Importance of Charitable Giving Strategies • Analysis of over 1,200 RIAs and family offices • Firms offering charitable planning have 6x the median assets • 3x the median organic growth • 27% higher multigenerational resource value 4. What is a Donor-Advised Fund? • Definition and basic concept • A giving account for future charitable giving • Donors make contributions, receive tax deductions, and make grants over time • Transaction flow: Donor → DAF → Nonprofit/Social Venture 5. Benefits of DAFs • Contribute Any Type of Asset: • Traditional: Cash, public securities • Non-traditional: Private business interests, real estate, cryptocurrency, fine arts, collectibles • Flexible Account Management: • Preferred custodian access, tailored investment strategies, trusted advisor management, alternative investments • Better Giving Opportunities: • Donations, grants, loans, equity investments • Domestic and international grants • Impact investments 6. Comparison: Donor-Advised Fund vs. Private Foundation • Fees & Setup: • DAF: Immediate, low fees • Private Foundation: Several months, high fees • Tax Benefits: • DAF: Higher AGI tax deductibility for various assets • Private Foundation: Lower AGI tax deductibility, different valuation methods • Succession Plan: • DAF: Flexible successor options • Private Foundation: Board vote required • Distributions: • DAF: No required distributions • Private Foundation: 5% annual distribution required • Anonymity: • DAF: Possible • Private Foundation: Public 7. Strategy #1: Charitable Bunching • Concept: • Front-load multiple years of donations into a DAF in one tax year • Generate larger itemized deductions, distribute funds over time • Case Study: • Comparison of tax savings with and without charitable bunching 8. Strategy #2: Gifting of Private Business • Benefits: • Avoid capital gains tax • Receive income tax deduction • Case Study: • Family donating $2 million of business equity to a DAF before sale • Immediate tax deduction and capital gains tax elimination 9. Where Does a DAF Fit? • Donor Focus: • Charitable intent, high-income years, business sales, tax and estate planning, capital gains management 10. Questions to Consider • Charitable intent and active donors • Need for tax deductions • Preference for private foundation benefits without complexity • Ownership of liquid assets or private business interests 11. Recap • Review of learning objectives • Strategic use of DAFs for philanthropy 12. Conclusion