Comparing Private Foundations and Donor Advised Funds
By Megan Sanders
Although 98% of high net-worth clients give to charity, only 55% report discussing philanthropy with their professional advisors.” E.R. Heisman, 41 Estate Planning, No. 7, 27 (July 2014).
This should be a huge wake-up call to all of us who are advisors! We have such a meaningful opportunity to engage our clients in a deeper conversation, bringing their philanthropic goals to the discussion. We need to be proactive in asking the questions of our clients – “What type of charitable goals do you have?” or “Is leaving a charitable legacy important to you?” This particularly applies to donor advised funds (which will be referred to as “DAFs” throughout), as they are the fastest growing giving vehicle in the U.S. philanthropy scene. Id.
Although our conversations with clients should include various types and forms of charitable giving, this article will focus on and compare private foundations with DAFs, providing considerations to be discussed with your charitably-minded client, followed by some suggested key language for use in your practice when implementing one of these planning vehicles.
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