Donor Advised Funds at the Boston Foundation
A Donor Advised Fund (DAF) is a charitable giving account created by an individual, family or organization. It offers an immediate tax benefit and allows you to make grants over time to your favorite nonprofit organizations. A Donor Advised Fund is an attractive and economical alternative to a private foundation.
When you open a Donor Advised Fund at the Boston Foundation, you will be provided with a dedicated Donor Services advisor who will discuss your giving goals, help you identify and evaluate nonprofit organizations and programs, connect you with other fund holders who share your philanthropic interests, create a plan that involves your family in your grant making, and consider the future of your donor advised fund. With the added resources of The Philanthropic Initiative, we can help you define a focus for your giving, create a mission statement or build a grants management program.
You also will be invited to participate in the full life of the Boston Foundation: from events and networking opportunities, to our research and forums.
Donor Advised Fund Frequently Asked Questions
How does it work?
You establish a fund at the Boston Foundation with a minimum gift of $10,000, which is tax deductible, and then use it to make grants out to qualified 501(c)(3) organizations when and as you wish. Gifts may be made in the form of cash, stock, real estate, and other non-cash assets.
You can add to or replenish your funds at any time, with no minimum requirement. There is no minimum requirement for additional contributions. We accept most types of gifts, including cash, publicly traded and restricted stock, IRAs, whole life insurance policies, real estate and other non-cash assets including limited partnerships, C-Corp and S-Corp stock, and tangible personal property. When you transfer non-cash assets are transferred to a Donor Advised Fund properly, they can be gifted without incurring capital gains taxes, allowing 100% of the proceeds to be given to charity.
What’s the difference between a Donor Advised Fund and a private foundation?
Donor Advised Funds offer the benefits of a private foundation at a fraction of the cost without the associated legal, tax and regulatory burdens. Private foundations have operating costs, time-consuming record-keeping and must fulfill federal and state reporting requirements. In addition, their detailed tax returns are public records easily accessed by online searches.
The Boston Foundation charges a small fee for administration and management and takes care of administrative, grant making, due diligence, legal and tax requirements for its fund holders. In addition, it can easily facilitate anonymous gifts.
Just as with private foundations, Donor Advised Funds allow donors and organizations to support the charities that are important to them.
See a chart illustrating the advantages a DAF offers over a private foundation.
Download Customizing Charitable Solutions for Your Private Foundation.
Am I required to give away a certain amount each year?
No. Private foundations must disburse 5 percent of their assets each year, but there is no such requirement for Donor Advised Funds. However, our donors typically give much more than that – 15 to 20 percent a year.
Why should I open a Donor Advised Fund at the Boston Foundation?
The Foundation was founded in 1915 for one purpose: To receive gifts from generous donors and to use those resources to make grants to the nonprofit organizations meeting the needs of Boston-area residents every day. In FY2013, the Foundation and its donors made nearly $98 million in grants to nonprofits.
The fees we charge for administering Donor Advised Funds go directly to our operating budget, not to a for-profit bottom line. Boston Foundation DAF holders are therefore helping to fund independent research into the region’s most pressing issues, supporting our special initiatives and civic leadership activities and providing free public resources such as the Giving Common.
In addition, as an advisor to a Donor Advised Fund, you are invited to participate in the full life of the Boston Foundation: from events and networking opportunities, to our research and forums. With a dedicated Donor Services liaison as your guide, you will have access to a range of expertise and strategic advice. Our knowledgeable staff can connect you with charities close to home and far away—lending expertise on a wide range of issues and helping you measure the real impact of your giving.
Can I give money to anyone I choose through my DAF?
You may recommend grants to any qualified 501(c)(3) public charity or operating foundation in the United States and to international organizations with the same status, subject to the Foundation’s standard due-diligence procedure.
Can the Boston Foundation help me find worthy organizations to support?
The Boston Foundation has an entire department that is dedicated to working closely with donors to make their philanthropy as effective and fulfilling as possible. As a donor advised fund holder, you have a dedicated Donor Services advisor who is always happy to discuss your giving goals. We can help you identify and evaluate nonprofit organizations and programs, connect you with other fund holders who share your philanthropic interests, create a plan that involves your family in your grant making, and consider the future of your donor advised fund. With the added resources of The Philanthropic Initiative, we can help you define a focus for your giving, create a mission statement or build a grants management program.
Through the Permanent Fund for Boston, the Boston Foundation makes millions of dollars in grants each year to Greater Boston nonprofits, giving us an unparalleled in-depth knowledge of the organizations working every day to address the region’s most pressing challenges. Donors are encouraged to attend Foundation-sponsored events, educational programs, and other opportunities to gain a deeper understanding of important problems and the strategies being employed to solve them.
How do I get started?
Establishing a Donor Advised Fund at the Boston Foundation is quick and easy. You may download and print a fund agreement. Our Donor Services staff is also happy to help. Please call the Office of Development and Donor Services at 617-338-2679 or e-mail any questions you might have.
Our online Donor Solutions Center can show you how others do their philanthropy through the Boston Foundation, provide practical advice on making your giving more powerful and connect you with programs and initiatives that are making a real difference in our region every day.