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Donor Advised Funds

What is a Donor Advised Fund?

A Donor Advised Fund is a fund established by a charity to receive contributions by donors, and then distribute the money to the charities that the donor "recommends" at a later date.

The donor gets a charitable deduction at the time of the transfer to the DAF, not at the time of distribution to the charities.

How does a Donor Advised Fund Work?

The donor contributes cash or securities, usually in amounts of $10,000 or more to the DAF when convenient, and at a time when it is most advantageous for him/her.

Then, when he/she wants to have money sent to specific charities, he/she recommends to the organization operating the DAF, that specific amounts, usually a minimum of $500, should be distributed to specific charities.

Two Taylor University DAF Formats

Taylor University operates two types of DAFs. A "pass through" DAF accepts an initial gift of at least $10,000 and will distribute amounts of $500 or more to individual charities. This DAF is expected to terminate in 10 years or less, or be replenished by additional gifts.

A "long term" DAF requires at least $25,000 to establish and then the earnings can be distributed for the donor's lifetime or a term of 20 years, whichever is longer. The minimum distribution check is $500 per charity.

What are the benefits to a donor?

  • The donor can time his charitable contributions when convenient and advantageous.
  • The donor gets the tax deduction for the charitable contribution on the date of the gift to the DAF.
  • The donor can decide later what charities to support, how much to give, and when to give.

What are the benefits to Taylor University?

  • Taylor University's William Taylor Foundation will manage Donor Advised Funds where at least 20% of all distributions come to Taylor. That assures future gifts to Taylor.
  • Taylor maintains a close relationship with donors who have established DAFs.
  • All such gifts support the mission of Taylor University.

What are the differences between a Donor Advised Fund and a Private Charitable Foundation?

  • DAF: No start-up costs.
  • PCF: Legal fees and accounting fees to establish.
  • DAF: Simple record keeping by the charity.
  • PCF: Assets must be managed properly and foundation tax return required, resulting in considerable expense.
  • DAF: Charitable deduction limits for individuals are 50% of income for cash and 30% for appreciated assets valued at full fair market value.
  • PCF: Charitable deduction limits are 30% of income for cash and 20% for appreciated assets valued at full fair market value.

What Charities can I recommend to receive distributions?

You can recommend any charity that has a valid 501 (c) (3) tax-exempt status from the IRS. However, the William Taylor Foundation will not support any organization whose purposes are inconsistent with the Judeo-Christian ethics of Taylor University.

How can I establish a Donor Advised Fund?

Call the William Taylor Foundation.

We will complete a simple application and handle the details. You transfer the assets.