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Donor-Advised Funds (DAFs) have become one of the fastest-growing philanthropic tools in recent years for good reason. They offer donors a flexible, tax-efficient way to support the causes they care about most, including nonprofits like Caminar.
A DAF is essentially a charitable investment account. You can contribute assets such as cash, stocks, cryptocurrency or other investments to the fund, receive an immediate tax deduction while also avoiding capital gains tax. Assets that might otherwise be a tax liability become a double advantage: you receive full deduction on their value, with no capital gains taken.
Through your DAF’s online portal, you can easily recommend grants to any nonprofit. This allows for thoughtful, strategic giving while maximizing financial benefits. Since the tax deduction is taken in the year you contribute to your DAF, you can give freely at any time thereafter. Your funds will continue to grow tax-free while you plan your charitable giving.
Why are more donors choosing DAFs?
The answer lies in simplicity, impact, and control.
DAFs make it easy to manage charitable giving, even across multiple organizations. They offer tools for gifts (called DAF grants) such as grant notifications, recurring grant schedules, and grant tracking. It is also easy for DAF owners to choose to remain anonymous, which is ideal for those seeking full privacy.
DAFs create an opportunity to involve younger family members in philanthropic decision-making. Many donors include their DAFs in estate planning, allowing their charitable legacy to continue on.
For Caminar donors, DAFs offer a meaningful way to sustain our mission while aligning with personal financial goals. Whether you're new to DAFs or already have one, we encourage you to consider how this tool can deepen your impact.
What’s the difference between a DAF at a Community Fund versus a Financial Institution?
When considering a Donor-Advised Fund (DAF), it's worth exploring options beyond national financial institutions. Local community foundations often provide personalized service, deeper connections to local causes, and the opportunity to invest directly in your community. They closely follow the work of local nonprofits and can help align your giving with regional needs.
At the same time, many financial institutions such as Charles Schwab, Fidelity, or Wells Fargo offer DAFs that may integrate easily with your existing investment accounts, making set-up and management seamless.
If you’d like to learn more about giving through a DAF or explore how it may impact your philanthropic giving with Caminar, we’re here to help. Your generosity fuels Caminar’s work and together, we are improving the lives of individuals and families within our community.
This article is intended for informational purposes only and does not constitute tax, legal, or financial advice. Caminar encourages donors to consult with their own professional advisors to determine the best giving strategies for their individual circumstances.
