Relationship Advice for Navigating Your DAF

Working with a donor-advised fund is a relationship. Like any relationship, people have questions. As a full-service organization, DonorsTrust is here to answer those burning concerns about your DAF relationships. Let’s see what’s in the mailbag this month.

I’ve thought about trying a DAF, but, like, I dunno. What if it doesn’t work out and stuff? I don’t want to be stuck for, like, ever. —Commitment Issues

I get it. Opening up a donor-advised fund seems like a big step. But think about it this way: You were going to give that money to charity anyway. Why not have a go at giving it through a fund for a year and see how it goes? Put the money in your fund, get those tax-deduction pleasantries out of the way, and then take time to see if the added simplicity and flexibility of a DAF is right for you. If not, grant out all the money and be on your way. But you’ll never know if it is true love if you don’t take the first step. So, go ahead—open a fund.

I feel like my DAF relationship is just on autopilot, but then there will be times where we just burst out in a flurry of action. Is that normal? —ACHer In Detroit

That initial flurry of activity in opening a DAF fills the heart with wonder—signing application, initiating that first big contribution, receiving that beautiful welcome packet in the mail. But the sign of a strong DAF relationship is when those blissful early days segue into something routine. It shows an incredible level of trust and commitment to automate that giving into a DAF month after month. That steady work pays dividends when you get to that special grant-making time and everything is all ready for you to give generously. ACHer, we only wish your story were more normal!

I’m a very private person. Is a DAF really right for me? —Anonymous

For the private giver, the donor-advised fund offers a terrific level of privacy. When you don’t want an organization to know it’s you on the other side of the check, your DAF gives you the ability to give money without your name attached. As far as your giving goes, you’ve given your tax-deductible gift to the DAF provider, such as DonorsTrust. It’s the provider that then formally makes the grant to the organization. You as the advisor get to recommend how you wish to be recognized. We know people give privately for many reasons. Make your DAF a partner in those quiet charitable efforts.

I’d really like to introduce my Charitable Remainder Trust to my DAF but I’m worried they won’t get along. What do you think? —LegacyLover

That’s a big step! Fortunately, it is also a great one. As you surely know by now, your DAF has many great attributes. One attribute it doesn’t talk about enough is its ability to serve as a beneficiary of a charitable remainder trust (CRT). In fact, it can do the same for a charitable lead trust (CLT) or simply as the beneficiary of one’s will. Leaving those charitable assets to a donor-advised fund account offers a bit more flexibility on how the funds ultimately get disbursed. For example, what happens if the organization set to receive funds from the CRT falls out of favor with you? You’ll need to find a lawyer to update the CRT—an expensive hassle! If the donor-advised fund is the recipient, you just have to casually inform the DAF provider of your changed intentions—no lawyer required! Good luck. I’m sure they’ll get along great.

My DAF told me it wanted to just give and give, but then out of nowhere it just rejected my idea for a gift. I feel tricked. What do I do?  —LowFidelity in Long Beach

Oh no! LowFi, I’m sorry to hear this news, though, sadly it is something I am hearing more and more. Let’s face it:A DAF provider has the right to decide what causes it will and will not give to. That’s just the way it is. However, while that might be the law, we still expect some transparency and candor before we start the DAF relationship. Some of the bigger DAFs make it seem like they’d say “Yes” to any giving adventure, so it is a shock when they change the rules. Others, particularly mission-driven DAFs like DonorsTrust, know their limits and strengths, and they will tell you those at the outset. The good news is there are plenty more DAFs in the sea, and it is easy to roll over your DAF from one provider to another that may be a better fit for you.

Open Your Fund


  • Peter Lipsett

    Peter Lipsett is vice president at DonorsTrust. He also leads DonorsTrust’s Novus Society, a network of donors under 40 committed to growing their philanthropic know-how. He has a dual degree in political science and theater from Davidson College and finally got a practical credential with an MBA from George Mason University.

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