What Is A Donor-Advised Fund Also Known As ‘DAFs’?

From the perspective of a donor, a donor-advised fund (DAF) offers a strategic and convenient approach to philanthropy.

Here's how it looks:

1. Strategic Giving: Donors can contribute assets, such as cash or securities, to a donor-advised fund, allowing for a thoughtful and strategic approach to charitable giving.

2. Immediate Tax Deduction: One of the immediate benefits is the ability to receive a tax deduction for the full amount of the contribution in the year it is made. This encourages and facilitates a commitment to supporting charitable causes.

3. Investment Opportunities: The contributed assets are typically invested, providing an opportunity for potential tax-free growth. This allows donors to maximize the impact of their contributions over time. It's worth mentioning that while donors receive a tax deduction when they contribute to a donor-advised fund, there's no legal obligation to distribute the funds immediately.

4. Flexibility in Grantmaking: Donors, or individuals appointed by the donors, can recommend grants to qualified charitable organizations over time. This flexibility enables donors to carefully consider and support the causes that align with their values.

5. Streamlined Giving: Donor-advised funds are often managed by public charities or financial institutions, streamlining the administrative aspects of charitable giving. This allows donors to focus more on the causes they care about rather than the logistics of managing individual donations. They are popular because they provide a convenient and efficient way for individuals to manage their charitable giving, especially for those who may not want to establish and manage a private foundation.

6. Family Involvement: Donors often involve their families in the philanthropic process, fostering a culture of giving and social responsibility. DAFs provide a structured way for multiple generations to participate in charitable activities.

7. Privacy and Anonymity: Some DAFs offer the option for donors to give anonymously, providing privacy in their philanthropic endeavors if desired.

8. Impactful Legacy: Donors can use DAFs to plan and create a lasting impact, establishing a legacy of giving that extends beyond their lifetime.

In essence, donor-advised funds empower donors to be intentional, strategic, and impactful in their charitable contributions, while also providing financial benefits through tax deductions and investment opportunities. The flexibility and streamlined nature of DAFs make them an attractive tool for donors seeking to make a difference in their communities and beyond.

Who Qualifies To Receive A DAF And How Do I Know They Are In Compliance?

In Canada, charitable organizations must be registered with the Canada Revenue Agency (CRA) to be eligible to receive donations, including those from donor-advised funds. Here are some key points:

Registered Charities: To be eligible to receive donations from a DAF in Canada, an organization must be a registered charity with the CRA. The CRA has specific criteria that organizations must meet to obtain and maintain charitable status.

1. Eligible Charitable Purposes: Charitable organizations in Canada must operate exclusively for charitable purposes, such as relief of poverty, advancement of education, advancement of religion, and other purposes beneficial to the community.

2. Qualified Donees: The CRA maintains a list of "qualified donees," which includes registered charities, certain Canadian amateur athletic associations, national arts service organizations, and more. Donations from DAFs in Canada are typically directed to qualified donees.

3. Compliance with Regulations: To maintain their charitable status, organizations must comply with the regulations set by the CRA, including filing annual information returns and using their resources for charitable activities.

It's essential for donors and the sponsoring organizations of DAFs in Canada to ensure that their grant recommendations align with the CRA's regulations and guidelines. Working with legal and tax professionals who are knowledgeable about Canadian charitable giving regulations can help ensure compliance and maximize the impact of charitable donations.

What Is A Sponsoring Organization For DAF’s?

1. Public Charities: Many DAFs are established and managed by public charities, which are tax-exempt organizations that operate for the public benefit. Examples include community foundations, religious organizations, and other charitable entities. These public charities often have a broader mission beyond managing donor-advised funds and may be involved in various philanthropic activities within a community or a specific sector.

2. Financial Institutions: Some DAFs are offered and managed by financial institutions, such as banks, investment firms, or brokerage firms. These institutions provide donors with DAF services as part of their broader suite of financial offerings. Donors who use DAFs through financial institutions can have their DAF accounts integrated with their overall financial portfolios.

3. Single-Issue Organizations: In some cases, a single-issue organization, like a university or a hospital, may establish a DAF to manage and distribute funds related to their specific mission. While less common, these organizations may use DAFs as a tool for fundraising and donor engagement.

The management of DAFs involves handling the administrative tasks related to contributions, investments, and grant recommendations. This includes processing donor contributions, investing the contributed assets for potential growth, and executing grants to qualified charitable organizations based on the recommendations of the donors.

It's important for donors to choose a reputable and well-established sponsoring organization for their DAF, considering factors such as fees, investment options, and the organization's track record in efficiently processing grants and supporting philanthropic goals.

Does The Whole Dyslexic Society Qualify To Receive DAF’s?

Yes! The Whole Dyslexic Society is a federally registered charity. Our registered charity number is: 852190933RR000.

If you or someone you know would like to recommend a grant to the Whole Dyslexic Society please contact your sponsoring organization, which can be a public charity or financial institution.

We are a busy charity with a wide reach, nationally and internationally.

Our Mission: "To be an organization which offers a coordinated and central approach in addressing the needs of the dyslexic individual, their families and their community, while ensuring a safe place for accelerated learning, healing, education, social interaction and support of individual growth and development."

We have 4 objectives: Public Outreach, Prevention, Fundraising (Bursary Programs), & Community. To read more about each of our objectives please visit our page HERE.

To read more on the many ways you can contribute please visit our Giving Guide HERE.

Thank you for your Support!

info@thewds.org