Leaving a Legacy Through Donor-Advised Funds

Leaving a Legacy Through Donor-Advised Funds

By Christine Kutnick, CFRE

There are so many ways to support your favorite non-profit, and the Jewish Foundation of Austin and Central Texas, a branch of Shalom Austin is here to help you carry out your philanthropic goals. We have developed a three-part series to explain how we can help you and carry out tzedakah.

One popular way people give is through a donor-advised fund. As a matter of fact, many commercial companies have created charities that offer DAF programs. According to the Chronicle of Philanthropy, these charities are some of the largest non-profits in the country.

A donor-sdvised fund is a philanthropic vehicle established at a public charity to help charitable individuals streamline their philanthropy.

A DAF allows you to manage your various charitable donations over time.  It is excellent for individuals, families, and/or organizations who want to gain an immediate tax advantage and limit the number tax receipts because you make one gift but can disperse those funds to multiple organizations. Your funds can be given in one year or spread out over numerous years to your favorite non-profits.

Why are DAFs so popular?
DAFs act like a donor’s own private foundation, but without the significant legal costs or administrative burdens for the donor. You contribute assets such as cash, securities, house or other tangible items to your DAF and receive an upfront charitable tax deduction —like giving directly to a qualified charity.

It allows you to manage your charitable giving. By creating a fund, you have already set aside money to support the causes you care about.  

Your money is invested with other people’s money. Based on the type of fund you create, you can receive investment earnings in the funds not dispersed and donate those funds.  “I have been pleasantly surprised with the investment income I have earned on my DAF," according to Wade Monroe, co-chair of the Jewish Foundation cabinet. "In 12 years, we have dispersed 233 grants representing  57% of our original investment. As of now, we still have  85% of our total investment remaining,” Monroe explained.

It serves as a great tool to include family in your charitable choices. Some families have scheduled discussions and talk about what organizations or causes you want to support. This allows for excellent role modeling for children and gives them a voice in your family’s philanthropic values.

Jewish Foundation is here to help you if you are interested in creating a DAF.  The Foundation has partnered with Austin Community Foundation to provide this service and the minimum to open a fund is $5,000. These funds can be distributed to both Jewish and non-Jewish organizations.   

What additional services does Jewish Foundation provide its fund holders?
Jewish Foundation staff is available to help identify opportunities for funding or places of urgent need in the community, especially those needs that meet the particular philanthropic interests of the donor.

The Jewish Foundation provides educational opportunities to help the fund holders about strategic ways to be philanthropic.

The Jewish Foundation cabinet reviews the investment outcomes on a regular basis and serves as a second eye to ensure that the fundholders’ money is well managed.

To learn more about how to create a donor-advised fund, contact MariBen Ramsey at (512) 694-9779 or mariben.ramsey@shalomaustin.org. For more information about Jewish Foundation, visit www.shalomaustin.org/foundation.

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