Donor Advised Funds in the World of Philanthropy
When I entered the non-profit industry, I had never heard of Donor Advised Funds or planned giving. I started as a staff accountant and reconciled the complex asset platforms. It wasn’t until I was on the phone with one of our donors did I begin to understand the usefulness of a Donor Advised Fund. A Donor Advised Fund (DAF) is a charitable saving account allowing clients to donate money into their personal DAF account. The funds can be given to eligible nonprofit organizations over time
While working with one of our clients, who donated cash and a life insurance contract into his Donor Advised Fund, I realized he used this account for five reasons.
Flexibility
The client wanted to donate a lump sum of cash to charity, but was unsure of all the organizations he wanted to give. Some years he would give large sums to one charity; in others, he would divide his distributions into five charities. He loved the DAF flexibility. He knew that if he saw a need, he already had money to support that cause. He would call and be so passionate about the cause and explain to us exactly why he needed to help. It inspired me and our team to work harder to support his charitable goals. In 2022, our community of inspired changemakers distributed grants to 867 charitable organizations both domestic and international.
Sustainability
This client knew he wanted his children to continue giving after he was no longer living. That is why he also donated a life insurance contract to the fund. He wanted his name to mean something even after he was gone. It was his goal to keep changing the world whether he was here or not. I would cringe when he said that, but I realized it gave him peace – he still wanted to affect change. He wanted his kids and grandkids to be involved in the account. He also wanted to ensure his favorite charity would receive a $5,000 check each year in perpetuity. He believed that creating a streamlined income for a charity would help sustain the charity and his name. He viewed the DAF as a vehicle allowing him to leave a legacy of good. United Charitable, at the end of 2022, managed over 187 million dollars, all of which is designated for charity to support our clients’ legacies and provide funding to nonprofit organizations for years to come.
Organization
This client made me laugh every year because he would call to request the receipt for his annual donation to the DAF. I told him that could be accessed from his online portal with United Charitable, and he said he needed a reason to bother us. He would call and request the charities he had given to for the last five years, and we would mail him his report. The more than 15 million dollars contributed to United Charitable in 2022 speaks to the amount of administrative burden we have been able to lift off our donors, their financial advisors, and receiving organizations. Through United Charitable, his philanthropy was at his fingertips. He did not need to dig through a box of receipts since he could just give us a call. The preferance for working with us was because we did not have a 1-800 number with an automated voice – he liked communicating with a person who was just as invested in his giving as he was.
Engagement
Creating a legacy of good was of great importance to this client. As I stated earlier, he wanted to engage his kids and grandkids in giving. I would hear stories about why each family member wanted to support their cause. He felt very strongly about why certain reasons were less important than his cause. He used this vehicle to engage his family now and after his passing. Because of this, I love hearing from the next generation about where they give and why. United Charitable has over 600 charitable accounts and is invested in the ‘why’ of every single one.
Impact
Our client passed away in 2019. His kids are now managing the DAF. They give to amazing causes and honor their father whenever they choose a charity to support. I was sad when I learned of his passing because he will never understand his impact on me and how much he made me believe in philanthropy. He thought it was his responsibility to help and would always say, “It only takes one person. And why can’t I be that one person?” He told me that the ability to create change is powerful and that we help him do that. Impact is a funny word. It can mean many different things to different people. The impact could be the more than $35 million dollars distributed to charity in 2022 by United Charitable. The impact could mean a charity receiving consistent funding year after year. The impact could mean a one-time gift. The impact could mean the next generation learning how to find their personal causes. The impact could be the feeling that is felt when you decide to make charitable giving a strategy and a must. Our donor made such an impact in me, his family, and the charities he chose to support.
All charitable vehicles serve a purpose, and the DAF works for our donors. It was an honor to help him create his legacy.
Executive Insights Series
We are thrilled to introduce our new article series, Executive Insights, authored by our very own CEO, Julia Healey. With her extensive experience in the nonprofit sector, Julia will be sharing her insights on the latest trends in philanthropy, with a focus on Donor Advised Funds.
These articles will cover a range of topics. We hope that our community of inspired changemakers will find these articles informative and thought-provoking as we delve into the ever-changing world of philanthropy.