Donor advised funds

This can be a tax-savvy way to protect the land and water that makes southern Illinois special.

A donor advised fund, or DAF, is like a charitable investment account for the sole purpose of supporting charitable organizations you care about. When you contribute cash, securities, or other assets to a donor advised fund, you are generally eligible to take an immediate tax deduction. Then those funds can be invested for tax-free growth, and you can recommend grants to virtually any IRS-qualified public charity.

But perhaps, even more importantly, it’s a way for you to make a lasting difference at a time when you are needed more than ever.

How does a gift from a Donor-Advised Fund work?

Establish an Account: To establish your donor advised fund, you make an irrevocable contribution to a donor-advised fund sponsor, often through a financial institution or community foundation—which could include cash, stock, real estate, and more. Typically, you can personalize your fund too by naming it, appointing members to manage it, and appointing successors and charitable beneficiaries. 

You can recommend an investment strategy for the assets in your donor advised fund account. Any investment growth is tax-free, giving you the potential to create even more money for grantmaking.

Tax benefits: When you contribute to your donor-advised fund, you may be eligible to claim a tax deduction for federal or state income tax purposes. (Check with your tax advisor on your individual situation).

Because donor-advised fund sponsors are public charities, your donation is considered a tax-deductible charitable contribution. The amount of the deduction will depend on several factors, including the type of asset donated and how long you have owned it. This allows you to plan your gift when it makes sense for you and to recommend grants to your favorite charitable organizations, like HeartLands Conservancy.

Support your favorite charities, now or in the future: As soon as your donor-advised fund is established, you can make single or recurring grants to charitable organizations. When you make a grant to an organization, typically, a grant check accompanying a letter will be sent to the recipient organization. By letting the organization that you have recommended the grant, or by ensuring the sponsor includes your information on the accompanying letter, you will then receive an acknowledgement letter confirming the receipt of your grant. The donation can also be made for a special purpose noted, such as “In honor of” or “In memory of”. 

Create a legacy gift: The contributions remaining in your donor advised fund after your lifetime can be designated when you create or update your fund. By simply completing the beneficiary designation form assigned to your fund, you can name successor advisors to your fund or a specific charity(ies) to receive a portion of your fund balance.