Did you know you can make an even greater impact through strategic giving?
If you own appreciated stock or other investments, a Donor-Advised Fund (DAF) may help you give more to the causes you care about while making your charitable giving more tax-efficient. DAFs have become one of the fastest-growing charitable giving tools because they offer flexibility, convenience, and valuable tax advantages.
Since our founding in 1947, Texas Hearing Institute has partnered with families and supporters to create lasting impact through philanthropy. We understand how Donor-Advised Funds work and how they can help you maximize your charitable giving while supporting the causes that matter most. This guide will walk you through the basics and explain how a DAF can become part of your giving strategy.
What is a Donor-Advised Fund?
A Donor-Advised Fund (DAF) is a charitable investment account that allows individuals, families, or organizations to make charitable contributions and recommend grants to nonprofits over time. Your contributions are managed by a sponsoring organization, such as a financial institution or community foundation, which administers the fund on your behalf.
You can contribute cash, appreciated stock, or other eligible assets to your DAF and receive an immediate tax deduction. If you own appreciated stock, contributing it to a Donor-Advised Fund can help reduce capital gains tax and potentially lower your overall tax burden, allowing you to give more while paying less.
Many fundholders choose to name their fund, appoint advisors, and select investment options that allow charitable dollars to grow tax-free. Once established, you can recommend one-time or recurring grants whenever the time is right.
What are the Advantages of Donor-Advised Funds?
DAFs offer several financial and charitable benefits, including:
- Immediate tax deductions
- Up to 60% of adjusted gross income (AGI) for cash gifts
- Up to 30% of AGI for appreciated securities
- Potential to reduce capital gains tax on donated assets
- Unused deductions may typically be carried forward for up to five years
DAFs allow you to give more strategically, build lasting relationships with organizations you care about, and stay engaged with causes that matter to you. They also provide the flexibility to support charities over time rather than feeling rushed to make giving decisions.
You can even continue supporting organizations after your lifetime by naming them as beneficiaries of your Donor-Advised Fund. It’s a simple way to ensure your generosity continues making an impact for future generations.
How Do Donor-Advised Funds Work?
When you contribute to a DAF, you receive an immediate tax deduction in the year your gift is made. You may then recommend grants to one or multiple qualified nonprofit organizations immediately or over time.
The sponsoring organization manages administrative responsibilities, including investment management, due diligence, and issuing grants on your behalf. This allows you to focus on supporting the organizations and missions that are most meaningful to you.
DAF grants must be made to qualified 501(c)(3) public charities and cannot benefit individuals. Grants also cannot be used for personal expenses or event tickets, and all grants must comply with IRS regulations.
What are the Benefits of Donor-Advised Funds?
Setting up a Donor-Advised Fund is straightforward and often requires minimal paperwork.
Benefits include:
- Flexible funding options including cash, stocks, and other appreciated assets
- Immediate tax deductions for eligible contributions
- Tax-free investment growth within the fund
- No annual distribution requirements
- The option to recommend grants anonymously
Whether you prefer to make one large contribution or support charities gradually over time, a DAF allows you to create a giving strategy that fits your financial goals.
Why Support Texas Hearing Institute Through Your Donor-Advised Fund?
Texas Hearing Institute helps children with hearing loss access sound, build communication, and reach their full potential. Today, that impact is growing—serving families across 70 Texas counties and 4 Louisiana parishes, with nearly 9 out of 10 children returning for follow-up care when it matters most.
A gift through your Donor-Advised Fund helps provide life-changing hearing healthcare, speech therapy, education, and family support for children who are deaf or hard of hearing. Together, we can continue creating brighter futures for generations of children.
If you’re ready to make your charitable giving go even further, will you please consider recommending a grant to Texas Hearing Institute through your Donor-Advised Fund?
Learn more about ways to give and pledge your support here: https://www.texashearing.org/ways-to-give/
