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Donor Advised Funds (DAF) a way to partner with MFB
Midwest Food Bank values our donors and we steward every gift with integrity. We frequently receive questions about various ways to give to MFB and one mechanism - Donor-Advised Funds - is a way donors have partnered with MFB to achieve their giving goals and benefit our mission.
A Donor-Advised Fund (DAF) is a type of giving program that allows you to combine tax benefits with the flexibility to support your favorite charities.
How does it work?
• Establish your DAF by making an irrevocable, tax-deductible donation to a public charity that sponsors a DAF program (For example: Fidelity Charitable, Schwab Charitable, etc). Local Community Foundations also utilize DAFs and can work with donors in their own community.
• Advise the investment allocation of the donated assets (any investment growth is tax-free).
• Recommend grants to qualified public charities of your choice. What are the main advantages of a donor-advised fund?
- Simplicity - The DAF sponsor handles all record-keeping, disbursements, and tax receipts.
- Flexibility – Timing of your tax deduction can be separate from your charitable decision making.
- Tax-efficiency – Contributions are tax-deductible and any investment growth in the DAF is tax-free. It is also easy to donate long term appreciated securities, eliminating capital gains taxes and allowing you to support multiple charities from one block of stock.
- Family legacy – A DAF is a powerful way to build or continue a tradition of family philanthropy.
- No start-up costs – There is no cost to establish a donor-advised fund. However, there are often minimum initial charitable contributions to establish the DAF (typically $5,000 or more).**
- No transaction fees – Once approved, 100% of your recommended grant goes to your qualified public charity of choice.
- Privacy if desired – Donors may choose to remain anonymous to the grant recipient.
Please note, the guidelines we've outlined here are general and we encourage donors to seek tax professionals for personalized tax advice. Also, sponsoring organizations generally assess an administrative fee on the assets in a DAF. These fees vary by sponsoring organization.
If you would like more information on how to make a non-cash gift to Midwest Food Bank, contact our Chief Resource Officer, Jada Hoerr, here. Other examples of non-cash gifts include:
- Appreciated Securities
- IRA Qualified Charitable Distribution
- Estate Gifts
- Charitable Annuities
Click here for some sample estate bequest language.
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