Donor advised fund
One of the most popular giving options today
Similar to a private foundation, a donor advised fund (DAF) provides an immediate full tax benefit and lets you donate to your favorite charities, but with less expense and setup.
How donor advised funds work
A DAF administered by Raymond James Charitable provides an easy way to make significant charitable gifts with immediate tax benefits and deductions. An agreement is created between you and Raymond James Charitable, which allows you to advise how portions of the charitable gifts are used.
The benefits of a donor advised fund
DAFs serve as tax-efficient giving vehicles, offering many of the same benefits as private foundations while being easy to set up and maintain. Some of these benefits include:
- No capital gains tax on long-term appreciated assets that are gifted
- Immediate tax deduction for the full market value of the gift* for most assets
- No excise taxes, unlike a private foundation
- Assets donated are no longer part of the estate value
- No minimum annual distribution requirement for DAF account holders
You will be asked to advise in four areas:
- How the money is invested within the options offered by the fund
- Which charities will ultimately receive grants from the fund
- How much will be given to each charity
- Who will make these decisions instead of or as a successor to you
To learn more about establishing a DAF, talk to your financial advisor. We recommend you work with your financial advisor alongside your legal and tax professionals to coordinate the most appropriate charitable solution for your situation.
*Any amount that can’t be deducted in the current year can be carried over and deducted for up to five succeeding years.
Key considerations before choosing a DAF:
There are some requirements to get started.
Please review these facts and figures before choosing to open a DAF account.
- A $10,000 minimum contribution is required to open an account.
- There is a tiered fee schedule for investment management and administration of the account that decreases as the balance increases, with a minimum annual fee of $125.
- We ask that you maintain a minimum balance of $500 in your DAF account for any market fluctuations.
- Additional contributions must be a minimum of $500, however exceptions can be made if the contributions are in memorial of someone.
- The minimum amount to grant to a charity out of your DAF is $100.
- Grants take 3-10 business days to process because each charity is reviewed for approval according to IRS requirements for DAF distributions.
Grants from your DAF must meet certain tax criteria.
Because your contribution is fully tax deductible at the time of the donation, all grants recommended out of your DAF must satisfy IRS rules for full deductions. For this reason, grants from a DAF cannot be used in certain cases.
We cannot make grants in lieu of a pre-existing pledge.
This is because, for the IRS, a pledge has the appearance of a personal debt, so fulfilling that debt would be seen as a personal benefit.
We cannot make grants to private non-operating foundations.
Private non-operating foundations can’t receive gifts because they have different tax treatments. Therefore, you can’t earn a 100% tax deduction through your contribution to a DAF and then pass those funds to a private foundation when a donation directly to that foundation would have earned a lesser deduction. However, while a DAF cannot pay into a private foundation, the reverse is acceptable. So, if you are considering both giving options, know that you are able to move your funds directly from a private foundation to a DAF.
Remember, because contributions into a DAF provide you with a full tax write-off, gifts out of your DAF account cannot pay for things that are only partially deductible, such as pay dues or membership fees, purchase tickets to a benefit or purchase goods at a charitable auction. Grants may not be used for lobbying, political contributions or political campaigns.
Grant recommendations can be made to the charity of your choice.
You can recommend a grant to any U.S.-based public charity qualified under Section 501(c)(3) of the Internal Revenue Service tax code, which we will check for you.
You can change your investment approach.
Donors have the ability to recommend transfers of their account from one investment option to another, subject to the approval of the board of trustees.
A DAF cannot purchase insurance on a donor’s life.
This type of investment is not permitted.
Contributions to your DAF cannot be withdrawn later.
All gifts made to your DAF, which must be in the form of securities or cash, are irrevocable.
Naming Raymond James Charitable as the beneficiary
Individuals have the opportunity to name Raymond James Charitable as beneficiary of their will, trust, IRA, annuity contract or life insurance policy. By doing so, they can create a "planned gift" that will be distributed to Raymond James Charitable after their death. To set up this type of arrangement, the attorney must use the legal name "Raymond James Charitable Endowment Fund" as the name of the beneficiary. To learn more, view the Planned Gift Donor Account Application.
Assets contributed to Raymond James Charitable are invested tax free. At the time of your contribution, you may recommend that your contribution be invested in any of seven investment objectives:
Seeks the preservation of capital and the production of income exclusively through investment in a money market fund investing in the highest quality, very short-term debt instruments.
Seeks income and the preservation of capital. Growth of capital may or may not be sought and will always be secondary.
Income with growth
Seeks to emphasize income and the preservation of capital over the growth of capital. Growth will be an ever present, but secondary, consideration.
Seeks to balance the production of income, preservation of capital and growth of capital.
Growth with income
Seeks to emphasize the growth of capital over the production of income.
Seeks long-term capital appreciation. Income may or may not be sought and will always be secondary.
Environmental, Social & Governance (ESG) Balanced
Seeks long-term capital appreciation with strong growth potential through investments with best-in-class environmental, social and governance practices.
Investment Advisor Program (IAP)
In addition to these investment objectives, accounts with market values of at least $500,000 may choose to use the Investment Advisor Program (IAP) option. This allows the donor to nominate his or her financial advisor to provide investment advice to the investment manager, Raymond James Trust, for assets held in the account.
Additional Information & Forms
- Exploring Donor Advised Funds Brochure (PDF)
- Donor Advised Fund Disclosure Brochure (PDF)
- Donor Advised Fund Investment Objectives (PDF)
- Donor Advised Fund Application
- Donor Advised Fund Investment Advisor Program (IAP) Agreement
- Donor Advised Fund IAP Investment Guidelines (PDF)
- Legacy Giving Recommendation Form (PDF)
- Donor Account Change Form (PDF)
- Planned Gift Donor Account Application (PDF)
- How our Donor Advised Fund Compares to a Private Foundation