By Jessica Miller
At Community Action Services (CASFB), we are profoundly grateful for the unwavering support and generosity of our donors, who play a pivotal role in advancing our charitable initiatives. Their commitment to making a positive impact on the community is the cornerstone of our ability to provide crucial services to those in need.
There are many ways you can assist Community Action, and one of them is through financial support. Many of our donors donate using their bank account, another new-to-the scene-option is to donate using a donor-advised fund (DAF).
But what is a DAF, and how can it be harnessed for effective charitable giving?
In this article, we’ll break down the concept of DAFs in simple terms, explore their tax benefits, and delve into why they are becoming increasingly appealing to individuals and organizations like CASFB.
Understanding DAFs
A DAF can be likened to a health savings account. In addition to all contributions being tax deductible, they are earmarked exclusively for the purpose of charitable giving. While in the fund, contributions are invested to grow over time to fund even more. Donors have the flexibility to use this fund to recommend grants to nonprofits of their choice at any time, however.
Benefits of DAFs
One benefit of donating through a DAF is that–like a health savings account–DAF funds are separate from your monthly budget and can’t be spent on anything else. With inflation as high as it has been, donating from a DAF allows you to free up funds in your budget for charitable giving so you can use them to cover other expenses in your budget.
Another key attraction of DAFs is the tax benefits they offer. When you contribute to a DAF, you enjoy an immediate tax deduction. This allows donors to make a positive impact on charitable causes while simultaneously benefiting from tax incentives. To learn more about these benefits, speak with your tax professional.
Setting Up a DAF
Setting up a DAF can be done through a financial advisor or online platforms offered by institutions like Fidelity Charitable or other investment companies. The process involves creating an account, making initial contributions, and specifying the charitable purposes for which the funds will be used. You can also see if your employer offers setting up a DAF as a benefit to their employees. More and more businesses are offering this as a perk and you are able to set up recurring contribution schedules.
Donate to CASFB Using a DAF
Once you have a DAF set up, you can easily donate to CASFB through your online DAF account or your financial advisor. We don’t always see who DAF donations come from when we receive DAF grants so we ask that you let us know when you have recommended a DAF grant to us by sending an email to jmorgan@casfb.org. We want to be able to thank you for your donation!
Each donation, whether big or small, fuels our mission of fostering self-reliance and helping those facing food or housing insecurity. Together, with your help, we are building a stronger, more resilient community. If you are looking to support our initiatives and help the members of our local communities, donor-advised funds provide a powerful way for charitable giving.