In his latest Kiplinger column, DonorsTrust CEO Lawson Bader explains charitable financial-planning tools, like donor-advised funds and foundations, don’t always have to compete against each other. Oftentimes, though, the decision over which tool to use for one’s charitable giving comes down to a few key factors and, ultimately, what a donor most values in his or her charitable giving.
At the core of the piece, Lawson helps donors analyze whether a donor-advised fund or a private foundation might be best suited to achieving one’s charitable goals.
“New givers or those looking to expand their giving may be considering strategies to add structure to their philanthropy and grow the impact of their giving. What’s more, the United States is experiencing one of the most extensive wealth transfers in its history, as those in my parents’ generation leave money to children (or not) and to their favorite charities.
Faced with how and to whom they should leave their money, donors may naturally wonder what kind of charitable vehicle they should use to advance their goals and legacy. Often this is a choice between two popular strategies: Start a family foundation or open a donor-advised fund (DAF).
The choice between a foundation or DAF comes down to how donors value the unique benefits of each option. Which tool is more likely to help someone achieve his or her philanthropic goals and cement their charitable legacy?”
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