Donor-Advised Funds (DAFs):
A great way to help nonprofits that matter to you (like Cancer Connection!)
Your financial and charitable goals are a reflection of your commitment to support the future
of your loved ones, charitable organizations you value, like Cancer Connection, and the greater community.
But sometimes it can be difficult to keep track of the organizations you wish to support and the documents required to receive your benefits from charitable gifts.
A convenient and easy way to organize your charitable intentions is to create adonor advised fund (DAF).
Consider it one-stop giving….
What is a Donor-Advised Fund (DAF)?
A donor-advised fund (DAF) is a charitable giving account established and managed by a sponsoring organization, such as a community foundation, financial services firm (for example, Fidelity Charitable or Vanguard Charitable) or other sponsoring organization.
A donor contributes money or other assets to the donor’s DAF, qualifying the donor for a federal and state income tax charitable deduction. The donor then is able to recommend grants to qualified nonprofits over time. Because the funds have already been set aside for charitable purposes, donors can support organizations whenever they choose—whether immediately or years later subject to the fund sponsor’s contribution policies and procedures and costs. With donor gifts being irrevocable, donors should make certain the DAF sponsor selected is one that supports the donor’s values.
Why Do Donors Use DAFs?
DAFs have become one of the fastest-growing ways people give to charity:
DAF assets grow tax-free.
Simple and cost-effective to establish, allowing flexibility on grant timing and grant amounts, subject to the fund sponsor’s minimum fees, minimum balances and minimum contribution and grant amounts.
Easy to manage, with the sponsoring organization handling administration and recordkeeping.
Tax-efficient, especially for gifts of appreciated assets.
Able to accept a variety of assets, including cash, stocks, and other investments.
Capable of supporting anonymous giving.
Unlike private foundations, DAFs do not require donors to file annual tax returns for the fund or manage ongoing administrative responsibilities.
Why DAFs Matter to Nonprofits?
DAFs represent a significant and growing source of charitable funding.
Some Key Trends
More than $228 billion in DAF assets are designated for charitable purposes.
Most DAF accounts opened after 2010, reflecting rapid growth in the market.
Many new DAFs are established during the final months of the calendar year.
Unlike foundation grants, nearly three-quarters of DAF grants are unrestricted, giving nonprofits the critical flexibility to use funds where they are most needed.
Many DAF donors prefer making recurring grants to their favorite organizations.
Majority of contributions into DAFs now come from non-cash assets, such as appreciated securities.
DAF assets can provide a reliable source of support during economic downturns and in response to emergencies or natural disasters.
We encourage you to consult your legal and financial advisors regarding the tax implications of any charitable gift. These advisors can help determine what is most appropriate for your circumstances.
If you have questions or would like to discuss supporting Cancer Connection through
a DAF, please contact Liz Horn, Development Manager at
development@cancer-connection.org
If you have a DAF and would like to donate to Cancer Connection:
our EIN # is 04-3493483
If you are interested in setting up a DAF, here are some sponsors to consider: [1]
DAFgiving360 (formerly Schwab Charitable)
Low-cost national platforms, sophisticated technology, excellent for tax-efficient giving, but relatively limited personalized philanthropic advising beyond grant administration and donor services. Perform extensive charity due diligence primarily for IRS compliance and organizational risk. Vast selection of investment options, similar to brokerage or retirement accounts.
Community Foundation of Western Massachusetts
Highest-touch local philanthropy partner. Strong regional expertise, customized philanthropic planning, planned giving support, estate planning collaboration with attorneys/financial advisors, and deep knowledge of local nonprofits. Conducts IRS compliance review plus local vetting and community knowledge. Mission-aligned investment structures. $10,000 minimum balance required to distribute grants. Minimum grants of $500. Annual fees start at $125. Based in Springfield, MA.
Mission-driven, relationship-based sponsor specializing in social justice philanthropy. Offers individualized grantmaking advice, research on grassroots organizations, anonymity options, socially responsible investment structures, and active grant due diligence for mission alignment. . Minimum balance of $5,000 and 1% fee on incoming contributions. Minimum grants of $250. No annual or transaction fees. Based in Amherst, MA.
[1] Fund sponsor’s contribution policies, minimum fees, balances and contribution and grant amounts shown are subject to change.
41 Locust Street, Northampton, MA 01060
1510 Allen St., Springfield, MA 01118
(413) 586-1642
www.cancer-connection.org
Cancer Connection, Inc. is a 501(c)3 nonprofit, EIN # 04-3493483
Creating a Legacy:
Legacy Giving Opportunities
A legacy gift is a meaningful way to support Cancer Connection's mission while creating a lasting impact on the causes you value most.
Legacy gifts—also known as planned gifts—allow you to support Cancer Connection’s work beyond your lifetime while often complementing your personal, family, and financial goals.
In addition to making an outright gift, you may choose to include Cancer Connection in your estate or financial plans.
Legacy giving is not reserved for individuals with extraordinary wealth. Many planned gifts can be arranged with little or no impact on your current financial resources.
Ways to Leave a Legacy
Charitable Bequest
A bequest is a provision in your will or trust that directs your personal representative (executor) or trustee to distribute a specific amount, a percentage of your estate, particular assets, or the remainder of your estate after other provisions have been fulfilled to charitable organizations including Cancer Connection. Because your gift takes effect only after your lifetime, you retain full control of your assets during your life and may revise your plans at any time. Depending on your financial circumstances, your estate may also receive valuable tax benefits.
Retirement Plan Assets
Cancer Connection may be designated as the beneficiary of your IRA, 401(k), 403(b), or other qualified retirement plan by completing a beneficiary designation form through your plan administrator. Because retirement assets may be subject to income and estate taxes when inherited by individuals, they are among the most tax-efficient assets to leave to charity as charities do not pay income taxes on gits or distributions received from retirement plans.
Life Insurance
Cancer Connection can be named as the beneficiary of an existing or new policy or in some cases be transferred ownership of a policy that is no longer needed for its original purpose. The potential tax benefits vary depending on how the gift is structured.
Donor Advised Fund
Cancer Connection may be designated as the beneficiary of all or a portion of your donor-advised fund. A successor advisor can also be named to allow future generations to carry on your charitable giving.
Charitable Remainder Trust
A charitable remainder trust enables you or another designated beneficiary to receive income from the trust for a specified period or for life. When the trust terminates, the remaining assets are distributed to one or more charitable organizations, including Cancer Connection, according to your wishes.
Charitable Lead Trust
A charitable lead trust provides income to one or more charitable organizations for a specified period. At the conclusion of the trust term, the remaining assets pass to your designated non-charitable beneficiaries. Depending on the structure of the trust and your circumstances, this strategy may provide significant estate and gift tax planning opportunities.
We encourage you to consult your legal and financial advisors regarding the tax implications of any charitable gift. These advisors can help determine what is most appropriate for your circumstances.
Frequently Asked Questions about Legacy Gifts
Who should have a will?
Every adult should have an up-to-date will or estate plan. An estate plan allows you to determine how your assets will be distributed, provide for family and loved ones, support charitable organizations that are important to you, and appoint the individual who will administer your estate. Without a valid will, your estate will be distributed according to the laws of the Commonwealth of Massachusetts.
I already have a will. How can I include Cancer Connection?
If you already have a will or trust, your attorney can help you add a charitable bequest. In some circumstances, a simple amendment, such as a codicil to your will or a trust amendment, may be appropriate.
When should I update my estate plan?
You should review your estate plan periodically and whenever you experience significant life or financial changes, such as marriage, divorce, the birth of a child or grandchild, the death of a loved one, retirement, the sale, purchase or receipt of major assets, or changes in your charitable priorities.
I am interested in naming Cancer Connection as the beneficiary of my retirement account or life insurance policy. What should I do?
Beneficiary designations are generally completed directly through your retirement plan administrator or life insurance company. Your financial advisor can help ensure your beneficiary designations align with your overall estate plan.
Who can help me determine the best legacy giving option?
Your attorney, financial advisor, accountant, or estate planning professional can help you evaluate the giving strategy that best supports your personal, financial, and philanthropic goals.
The Community Foundation of Western Massachusetts (www.communityfoundation.org) is an excellent resource for information on legacy giving and can partner with affiliated charities to offer management of complex legacy giving vehicles such as charitable gift annuities, endowed funds, or pooled income funds.
If you would like to discuss making a planned gift to Cancer Connection,
please contact Liz Horn, Development Manager at development@cancer-connection.org
41 Locust Street, Northampton, MA 01060
1510 Allen St., Springfield, MA 01118
(413) 586-1642
Cancer Connection, Inc. is a 501(c)3 nonprofit, EIN # 04-3493483