Investing in Community: What to Know About Donor Advised Funds

What if there was a way to invest your money while also investing in your neighbors? Consider a Donor Advised Fund (DAF), a smart way to make charitable donations now and in the future, with the added perk of immediate tax benefits.

A DAF works just like a savings account or IRA, but instead of contributing money toward retirement, this account is specifically for charitable giving. Over time, the assets you contribute are invested in the hopes that they increase. As they grow (tax-free), so does your impact on the community.

Another perk is that you can contribute cash, securities, and other assets to your DAF on your schedule. Each time you do, you are immediately eligible for a tax deduction. This is truly what separates DAFs from other means of giving: the tax benefit comes when you contribute, not when the money is dispersed.

Overtime, you can make intentional choices about how and when to support organizations important to you. DAFs also make it simple to give organizations that you care about larger and ongoing gifts. Since these funds have amassed over time, your giving will not impact your day-to-day finances.

Food Finders is among the many great organizations eligible to receive DAF donations. Especially in these uncertain financial times, with declining government support and a growing need in our community, your choice to direct your DAF funds to Food Finders means increased access to nutritious food for your friends and neighbors.

If you already have a DAF, consider talking to your sponsor organization about allocating funds to Food Finders. If you do not, opening a DAF is easy. Most large financial institutions, and many community foundations, sponsor DAFs. More than likely, you already have a relationship with one of these investment platforms or a financial advisor who can help you get started. Regardless of the institution, the best part is that you control every aspect of your DAF. You decided when to contribute. You decide how to grow your money. And you decided when to grant to organizations of your choosing.

If you have any questions about how your DAF gift could make a difference in fighting food insecurity in our service area, please reach out to Chief Advancement Officer Larry Sommers at [email protected].