Donor Advised Giving

Donor advised giving allows for more engagement and less administration.

A donor advised fund (commonly referred to as a DAF), is a giving vehicle that allows donors to make a charitable contribution, receive an immediate tax deduction, and then recommend grants from the fund over time. They can be expendable, invested or endowed, depending on your needs and your giving goals.

Many families, businesses, and individuals use donor advised funds in lieu of creating private foundations.

Please review PCF’s Donor Advised Fund Handbook for frequently asked questions and an overview of the donor advised fund process. Donors who wish to make grants from their Donor Advised Funds can do so directly through PCF’s online donor portal, or fill out a Grant Recommendation Form, available here.

You have three options when establishing a Donor Advised Fund with PCF:

Donor Advised Expendable Fund

This fund acts like a charitable checking account. You deposit assets (most commonly appreciated stock or mutual funds) and then direct PCF to send contributions (grants) to any IRS-approved U.S. charities you choose. This method is flexible and simplifies record keeping, as donors make one large charitable gift to their fund instead of multiple smaller ones to many different organizations.

You can deposit assets in your account in the tax year when it’s most advantageous to you, take the charitable deduction in that year, and distribute funds to your favorite charities then or at a later date. Many donors replenish their funds at the end of the year and then have a single record for tax return purposes.

Donor Advised Investment Fund

This fund is best suited for donors with a long-term giving horizon who want to continue to contribute assets to their fund over many years. These funds are often seeded with a large one-time gift (sale of company, gift of real estate, year-end bonus) when there is an advantage to taking the tax deduction in that year. The balance of your charitable fund is invested in the PCF portfolio for long-term growth. Donors may start to direct charitable gifts from the fund in any amount one year after establishing the fund at PCF.

Donor Advised Endowment Fund

This fund is well-suited for donors with family foundations who want to simplify administration while still directing grantmaking. The balance of the foundation is invested in the PCF investment portfolio for long-term growth. We calculate the annual payout for grants, and your family decides how that annual amount will be awarded to nonprofits. We handle the accounting, tax returns, and IRS compliance issues. You enjoy making the grants.

Please note that annual grants made from donor advised endowment funds are restricted to the “spendable balance” of the fund, which is the amount the fund has “earned” while it was invested over the course of the year. The “corpus” or original balance of the fund, may not be granted at any time.

Noteworthy

“We were able to simplify administration while protecting the legacy and purpose of our fund. My brother, Lawrence, and I remain involved along with so many of the trustees who have participated in the grant making decisions. Although Lawrence and I no longer live in Pasadena, the partnership with PCF means the Giesen Trust will continue to play an important role in our hometown.”

— Curtis Giesen, Board President, Giesen Trust Donor Advised Endowment Fund
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