A simple idea for multi-generational charitable flexibility
We have seen increased interest in including Donor Advised Funds as part of donors’ charitable estate gifts. They can be set up during the donors’ lifetimes (and added to upon their death) or simply created after the donor’s lifetime. These DAFs can be set up for anyone, but most commonly they are gifts to children and/or grandchildren to continue a legacy of charitable giving in the next generation.
Value
For the Donor
- Tax benefit of giving to a public charity
- Continue a tradition of philanthropy with younger generations
- Money has the feeling of “staying in the family”
For the Recipient
- All the benefits of having their own DAF.
- Use the fund to further their own philanthropic aspirations and respond to changing needs over time.
Example
The Foundation is in conversation with a family about the charitable portion of their estate plan. The family worked with their advisors to take advantage of all the possible exclusions from estate tax. Now the only avenue to avoid tax is donating to charity.
We are helping them set up Testamentary DAFs for each of their children. They have invited the Foundation’s CEO to attend a family meeting to speak about how the funds will work and begin the conversation with the children about their philanthropic strategies.