Donate from a Donor Advised Fund
What is a donor advised fund?
A donor advised fund (DAF) is a type of giving program that allows you to combine the most favorable tax benefits with the flexibility to easily support your favorite charities. An increasingly popular charitable vehicle, DAFs are an excellent way to both simplify your charitable giving and facilitate your strategic philanthropic goals.
How does it work?
- Establish your DAF by making an irrevocable, tax-deductible donation to a public charity that sponsors a DAF program
- Advise the investment allocation of the donated assets (any investment growth is tax-free)
- Recommend grants to qualified public charities of your choice
If I have a DAF, how do I use it to support a PMC rider?
If your DAF is with Fidelity Charitable, you can start your donation on the PMC website as follows:
- Go to the DONATE page
- Select the rider you wish to sponor.
- Enter the amount (in dollars) you would like to recommend in the "Amount:" field.
- Click on the Designate this as a gift from a Donor Advised Fund "CONTINUE" button to proceed to the sponsoring organization's website to complete yourDAF transaction.
If your DAF is with a different entity, you may process your donation through their usual method (be sure to designate the rider and their id number).
What are the main advantages of a donor advised fund?
- Simplicity – The DAF sponsor handles all record-keeping, disbursements, and tax receipts.
- Flexibility – Timing of your tax deduction can be separate from your charitable decision making.
- Tax-efficiency– Contributions are tax-deductible and any investment growth in the DAF is tax-free. It is also easy to donate long term appreciated securities, eliminating capital gains taxes and allowing you to support multiple charities from one block of stock.
- Family legacy – A DAF is a powerful way to build or continue a tradition of family philanthropy.
- No start-up costs – There is no cost to establish a donor advised fund. However, there are often minimum initial charitable contributions to establish the DAF (typically $5,000 or more).**
- No transaction fees – Once approved, 100% of your recommended grant goes to your qualified public charity of choice.**
- Privacy if desired – Donors may choose to be acknowledged or remain anonymous.
** Sponsoring organizations generally assess an administrative fee on the assets in a DAF. These fees vary by sponsoring organization.
How it works (Detail):
- An individual or entity makes an irrevocable contribution to a sponsoring charitable organization to establish a donor advised fund. This person becomes a donor-advisor.
- The sponsoring organization allocates the charitable contribution to the particular donor-advisor’s DAF. The donor-advisor has the opportunity to name the DAF (e.g. The John Doe Fund).
- The donor-advisor retains advisory privileges over the investment allocation for the DAF. Since the assets in the DAF belong to the sponsoring organization, any investment growth is tax free. The investment options available vary by sponsoring organization.
- The donor-advisor has advisory privileges over the disbursements made from the DAF. The disbursements are recommended by the donor-advisor, but must meet the grantmaking criteria of the sponsoring organization. Typically, disbursements may only be recommended to IRS-qualified public charities exclusively for charitable purposes. Additionally, the donor may not receive any more than incidental benefits as a result of the disbursement.
- Once the sponsoring organization approves the recommended disbursement, the grant is made to the qualified charitable organization. Rider accounts will be credited upon receipt of the check.
Whom should I contact with questions regarding giving to the PMC through a DAF?
If you have questions about making a gift to the PMC through a DAF, please call us at 781-449-5300 or email email@example.com.