Donor Advised Funds Fundamentals

DAF Management Best Practices

• Q: How often should clients review their DAF investment allocation?
• A: Recommend quarterly reviews aligned with overall portfolio assessment. DAF investments should be evaluated within the context of the client's entire investment strategy, with consideration for both short-term giving goals and long-term growth.

DAF vs. Other Giving Vehicles

• Q: When should a client use their DAF versus giving directly to a charity?
• A: DAFs are optimal for tax-planning years, appreciated securities, and when clients need time to research charities. Direct giving works better for immediate impact, small donations, or when charities offer matching programs.

DAF Distribution Timing Strategies

• Q: What guidance should I provide on distribution timing from a DAF?
• A: Consider recommending a giving schedule that balances immediate charitable impact with strategic growth. Many clients benefit from a hybrid approach: distributing a percentage annually while growing the remainder for larger future gifts.

Philanthropic Planning

Values-Based Giving

• Q: How do I help clients articulate their philanthropic values?
• A: Guide clients through a structured values conversation using the "Three Circles" framework: (1) Issues they care about, (2) Geographic areas of interest, and (3) Populations they want to support. Document these in their philanthropic mission statement.

Family Involvement

• Q: How can clients involve next generations in giving decisions?
• A: Suggest creating a "next gen" advisory committee with specific allocation authority. Start with a small percentage (5-10%) of annual distributions and gradually increase responsibility. Consider hosting family giving meetings quarterly.

Impact Measurement

• Q: How can clients measure the impact of their charitable giving?
• A: Recommend creating a simple personal impact dashboard with 3-5 key metrics aligned with the client's giving goals. For education funding, track graduation rates; for healthcare initiatives, monitor people served.