When families and their advisors contemplate establishing a charitable vehicle, they often compare and contrast the advantages of private foundations and donor-advised funds (DAFs). However, for many donors, the best choice isn’t either a private foundation or a DAF — it’s both. When used in combination, the advantages of a private foundation and a DAF can be synergistic, providing donors with a full spectrum of options for their philanthropic and wealth-management goals.
These options will change, however, if the recently announced Accelerating Charitable Efforts (ACE) Act becomes law. But for the time being, here are some of the benefits of using these two vehicles in tandem.
- Major gifts.
- Balancing transparency and discretion.
- Infinite giving options.
- Options for enabling discretionary grantmaking.
- Maximizing tax deductibility.
- Funding with alternative assets.
- Because no one can predict their future needs with certainty, establishing both a private foundation and a DAF provides maximum flexibility. Whereas DAF-sponsoring organizations’ policies typically ensure that family control over a DAF eventually sunsets, a private foundation is an independent legal entity, and control of its assets can be transferred from the founding generation to the next in perpetuity.
Read the full article about private foundations and DAF benefits by Mary Ann Stover at PhilanTopic.
Since you are interested in Family Philanthropy, have you read these selections from Giving Compass related to impact giving and Family Philanthropy?
Looking for a way to get involved?
If you are looking for opportunities to learn and connect with others interested in the topic of Family Philanthropy, take a look at these events, galas, conferences and volunteering opportunities aggregated by Giving Compass.
Are you ready to give?
If you are looking for opportunities to take action and give money to Family Philanthropy, here are some Giving Funds, Charitable Organizations and Projects aggregated by Giving Compass where you can take immediate action.