Year-End Gift Planning – Are you considering a donor advised fund (DAF)?

By Diana Mao, CFP, PFP, MFA-P, Senior Advisor, Charitable Giving Program

A donor advised fund is a simple and cost-effective alternative to establishing your own private foundation. These days, you do not need to be a Warren Buffet or Bill Gates to benefit from a more strategic and structured approach to creating your own philanthropic legacy. Donor advised funds are a useful way to centralize your charitable giving, efficiently make those year-end donations for tax planning purposes while taking your time to decide which charities you want to support. Easily donate gifts of cash and appreciated securities, or other complex gifts like life insurance, proceeds of employee stock options, corporate donations or even private company shares. Here’s how it works:

• Establish and name your donor advised fund with a charitable foundation such as the Raymond James Canada Foundation (RJCF). A DAF with RJCF is called a charitable giving fund and can be established in as little as a week with an initial donation of $100,000 or more. A tax receipt is issued immediately for your gift and can be used to claim a donation tax credit to offset taxes owed.
• Your donated assets will be professionally invested and managed by your financial advisor or portfolio manager while funds grow on a tax-free basis.
• You decide which registered charities will receive grants from your fund. You can set recurring grants to automatically disburse funds to your favourite charities.
• Create a charitable legacy by involving the next generation and naming them as successors to your fund or leave your charitable wishes with the foundation to continue the support to your favourite charities or charitable causes indefinitely.

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