If you know the National Christian Foundation well, you probably already have a donor-advised fund (DAF) or, as we call it, a Giving Fund. But if you’re new to NCF, the concept might be unfamiliar to you. That’s why, from time to time, we return to the basics: What’s a DAF, and why is it so popular?
A DAF is an account used solely for charitable giving, and it’s one of the most-flexible, effective, and popular tools for philanthropy today. It opens the door for you to be more strategic, more intentional, and more generous.
Contributions you make to a DAF are generally tax-deductible. You retain advisory privileges over how those funds are distributed to charities – either immediately or over time. This innovative way of giving has become popular because of long-term charitable impact and tax benefits.
You open a DAF with a sponsoring organization like NCF, which is a 501(c)(3) charity. And because it’s so simple to create and so accessible, you can give to your fund or recommend a grant to charity on a set schedule or any time you’re feeling generous.
Here are 5 reasons a DAF might be a good fit for you:
- Tax-efficient giving – When you make contributions, you can qualify for a tax deduction, reducing your taxable income for the year of the contribution. This generally not only lowers your tax liability but also leaves you with more to give. And at NCF, we have an in-house team of charitable professionals who will walk alongside you to help you determine the most strategic ways to give to maximize your charitable impact.
- Asset giving – You can donate appreciated assets, at fair market value, you’ve held for more than a year, and generally lower your capital gains tax. So, you’re left with more for supporting causes you care about. This double benefit of a tax deduction plus lower taxes is particularly valuable if you’re preparing for a liquidity event, seeking to maximize deductions in high-income years, or need time to develop a wise giving strategy. At NCF, we help givers create a Giving Strategy™ that examines all you have to give, what your goals are, and how to deploy your charitable capital for maximum impact.
- Charity screening – The money you contribute to a DAF is required to go to a qualified public charity in good standing with the IRS. Because NCF has a Christian mission, we also screen all charities for alignment with Christian values. Giving through a Giving Fund provides a measure of security you don’t get when sending support to charities through other types of giving platforms, and giving through NCF provides a values lens as well.
- Simplified giving – If you’re tired of writing checks and chasing down receipts at year end, you’ll like how much easier this is. You just choose the charities you want to recommend for grants, and we provide the grant administration and recordkeeping. No more tracking all the charitable receipts yourself. Instead, you’ll receive a single document for all your contributions. NCF also allows you to print reports of your quarterly or annual giving and investment reports.
- Growth potential – The funds in your account can be invested to grow tax-free while you strategize how you want to recommend they be distributed. You can choose from a number of options for investment, including traditional or faith-aligned pools. Your registered investment advisor may also be approved to help manage how your fund is invested.
And there you have the basics of a donor-advised fund.
But at NCF we don’t stop at the basics. There’s so much more. When you open a Giving Fund at NCF, you gain access to a local generosity community and a suite of tools to help you make the most of all God has entrusted to you. And our team of in-house charitable professionals offers personalized guidance for every step of your giving journey.
It’s our mission to promote biblical generosity and support Christian ministry, so with a Giving Fund, not only can you do more, but you also get a DAF that aligns with your values.
Learn more about a Giving Fund with NCF.
