Page 99 - Forbes Magazine-October 31, 2018

PROMOTION

investment strategy of the donor’s choice, where the assets
have the potential to grow until a grant recommendation is
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donor’s choice. In addition to cash contributions, a donor
can also give appreciated securities, such as stocks, and
therefore avoid paying capital gains, which means more of
their assets can go toward supporting the charities they
care about most. Givers get a tax receipt for the current
market value of the security.
“Getting the most from your DAF requires some
thought,” said Brothers. “Unlike writing a check to an
organization, these vehicles are ideal for timing your tax
deductions for when you need them most, even if you’re
not ready to recommend a charitable grant immediately.”

Leaving A Legacy
“DAFs are ideal for leaving a legacy,” said Brothers, “in
part because they give people time to think about how
they want to give.” Contributions to The T. Rowe Price
THE RAPID RISE OF Program for Charitable Giving are invested in at least
one of several investment pools that match the donor’s
investment objectives, overseen by T. Rowe Price
DONOR-ADVISED FUNDS to grow, and that frees donors to carefully consider how
portfolio managers. The initial donation has the potential
to structure their giving.
“These funds give you the ability to think
By Bryan Borzykowski about the kind of legacy you want to leave,
allowing for time to determine what you want to
do,” said Brothers.
ver the last few years, the charitable giving Those who want to pass on their wealth can also do it
world has undergone a major transformation. in a foundation-like way, without having to pay the kinds
Instead of contributing directly to a charity or, in
O the case of high-net-worth individuals, creating
a private foundation from which to donate, Americans “Our donors believe that
of all stripes are increasingly using donor-advised funds
(DAFs) for their giving needs. strong family legacy isn’t
According to the National Philanthropic Trust’s 2017 something you pass down from
Donor-Advised Fund Report, DAFs reached a record
$23 billion in contributions in 2016, making them the generation to generation, but
fastest-growing vehicle in philanthropy.
0[»Z LHZ` [V ZLL ^O`! ;OL`»YL ZPTWSL [V ZL[ \W VќLY rather something your family
an immediate tax deduction, and allow donors to invest
their funds and choose where to give over time. The creates and sustains together.”
DAF further alleviates many administrative burdens
associated with philanthropic giving by managing the JOHN BROTHERS
paperwork and directing investments. President, The T. Rowe Price Program for Charitable Giving
“Another contributing factor in the rapid rise of
DAFs is a savvy and sophisticated donor base — they of fees that come with running one. For instance, donors
are committed to making an impact by supporting can create a special name for the account in a fashion
charitable organizations closely aligned to their interests, similar to a private foundation. Additional donor-advisors
and they’re looking for the best vehicles to help them can also be named, to allow friends and family members
achieve their goals,” said John Brothers, president of [V WHY[PJPWH[L PU VUL HUV[OLY»Z JOHYP[HISL NP]PUN LќVY[Z
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The T. Rowe Price Program for Charitable Giving , Donors are also able to name a successor on the
which saw contributions grow by more than 30% year account, which means future generations can continue
V]LY `LHY PU ÄZJHS `LHY a philanthropic tradition using the same DAF account.
“Thanks to DAFs’ simplicity and range of options,
Long-Term Advantage these funds can help create a culture of giving within a
One of the advantages of DAFs is that individuals and family,” said Brothers.
businesses can use them. They work the same in both “Our donors believe that strong family legacy
scenarios: A donor, be it a person or a company, makes isn’t something you pass down from generation to
an irrevocable contribution to the DAF; he or she receives generation, but rather something your family creates and
a tax receipt for that donation; the assets are placed in an sustains together,” he added.
Note: All investments are subject to market risk, including the possible loss of principal.