Why Donor-Advised Funds are the Future of Charitable Giving

There’s an increasingly popular way to give on the scene: Donor-Advised Funds (DAFs).

Currently the fastest growing giving vehicle in philanthropy, DAFs are a smart way to support nonprofits and charitable organizations. They are a great way to support powerful missions and create a lasting impact, while being tax-effective and simple to use. Continue reading to learn about how DAFs work, their benefits and how to use one to support organizations you care about.

What Are Donor-Advised Funds?

A DAF is like having a charitable savings account: you contribute when it makes financial sense and, when you’re ready to disperse those funds, use those contributions to support the causes that matter most to you.

With DAFs, you can make charitable contributions, claim immediate tax deductions and actively participate in grantmaking recommendations for eligible nonprofits.

Benefits of Donor-Advised Funds

One major advantage of donor-advised funds is their tax effectiveness and simplicity in usage. Donors are eligible to receive a tax deduction when they donate to the fund, even if they decide to distribute the funds to charities at a later time. Investment growth within the DAF is exempt from taxes as well.

This efficient procedure makes record-keeping easier and provides adaptable decision-making, enabling you to concentrate on what is most important: making a positive on the nonprofits you care about.

Ensuring Your DAF Has a Benefactor

When establishing a donor-advised fund, one important consideration is ensuring it has a designated benefactor or successor advisor. This ensures your charitable goals are upheld in the future and that your funds are contributed to the nonprofits you are passionate about. When contemplating the legacy you wish to leave behind, consider naming Boys & Girls Clubs of America as a benefactor of your DAF.

Trends with Donor-Advised Funds

DAFs are rapidly becoming the fastest growing giving vehicle in philanthropy, with a surge in participation among younger donors under 40. This trend is attributed to several factors that are making DAFs more accessible than ever before:

• Lower barriers to entry: Forget about high minimums, most DAF providers are offering low- or no-minimum account balances, plus smaller minimum donation sizes.
• Tech is making DAFs a breeze. User-friendly online portals have streamlined the DAF experience and made managing your DAF easier than ever.

Celebrate DAF Day with Boys & Girls Clubs of America

At Boys & Girls Clubs of America, we’re energized around the future of charitable giving, including making giving back part of the values of our nation and as simple as possible for modern donors.

As part of this DAF giving revolution, our organization launched a brand-new feature on our website at bgca.org/daf that allows you to donate directly from your DAF in just three clicks.

On October 10, 2024, Boys & Girls Clubs of America is also proud to be a founding launch partner for DAF Day. We’re joining a collaborative group of leading nonprofits, fundraising platforms and DAF providers to spread awareness around donor-advised funds and activate a collective audience of millions of donors for a single day of unprecedented generosity. Visit dafday.com to learn more.

Become a Youth Champion in Just Three Clicks

Whether making a one-time donation, committing annually or utilizing a donor-advised fund, you are investing in the futures of the more than 400,000 kids and teens who enter the doors of a Boys & Girls Club each day.

If you have a DAF, please consider making a plan to donate to Boys & Girls Clubs of America on October 10th.

If you don’t have a DAF yet, you’re not alone: only 17% of the general population does. The good news? DAFs are for anyone and have never been easier to open. You can open a DAF with major financial institutions, community foundations and independent providers.

If you’re interested in additional ways of supporting Boys & Girls Clubs of America, there are many ways to leave a lasting legacy for the generations to come.