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Encourage Purchasers to Open DAF Accounts Earlier than It’s Too Late


Although advisors have opened quite a few donor-advised fund (DAF) accounts for shoppers previously 10 years, a few of these similar advisors are pissed off that others haven’t but opened accounts although these can be of their finest pursuits.

Final week, an advisor requested me for recommendation so he may persuade a few of his charitably-minded shoppers to open DAFs as a result of they’ve been reluctant previously. Most advisors, in addition to a few of their shoppers, perceive the advantages of DAFs: most tax deduction now and talent to grant over time; ease of creating grants on-line; anonymity when desired; means to just accept illiquid property; low charges; property develop tax-free; just one annual tax receipt.

Whereas some shoppers open DAFs the primary time they study them, typically others don’t open them till their advisors advocate them a second or third time. At this level, most high-net-worth donors have associates, members of the family or colleagues who’ve opened accounts. Although it’s getting very late within the 12 months and cutoffs for opening accounts and donating inventory and different property are looming, advisors must be inspired that there’s nonetheless time to strive once more.

Twelve Questions

Listed here are some questions which were useful for advisors to ask shoppers in an effort to stimulate their curiosity and encourage them to do what they need to have finished years in the past:

  1. Do you at the moment make donations to charities and count on to keep up or enhance these over time?
  2. Do you need to decrease taxes, particularly when promoting extremely appreciated property?
  3. Do you anticipate a big bonus or revenue this 12 months and need to put aside some property to fund future giving?
  4. Would you like or want a big tax deduction now however want time to determine which charities to help?
  5. Do you typically rush to ship donations on the finish of the 12 months?
  6. Does your revenue fluctuate, making it tough to donate constant quantities yearly to your favourite charities?
  7. Do you anticipate a liquidity occasion similar to promoting a enterprise or actual property or receiving an inheritance within the not-too-distant future?
  8. Would you like a easy manner of sending donations to many charities from a web based portal as a substitute of sending inventory or checks or making bank card donations?
  9. Would you favor to obtain just one annual donation acknowledgement letter as a substitute of getting to maintain observe of quite a few ones from the charities you help?
  10. Would you prefer to encourage and contain your heirs in charitable giving selections and planning?
  11. Would you like the flexibility to present anonymously at occasions?
  12. Do you will have a personal basis that’s cumbersome, expensive and complex to function and desire a extra environment friendly and cheaper possibility that accomplishes the identical charitable objectives?

Peak Season

Some shoppers is probably not able to open a DAF or change what they’ve been doing for years, however now’s an ideal time to ask these questions as a result of that is the height charitable giving season and everybody receives quite a few donation requests right now of 12 months. Most shoppers proceed to be philanthropic and can be happy to know of ways in which they’ll have a higher influence on the causes and charities which can be most necessary to them.

Ought to they not be able to open a DAF this 12 months, charities nonetheless want and would admire their direct help earlier than year-end. By broaching the topic now, shoppers shall be extra more likely to open a DAF earlier subsequent 12 months and keep away from the identical scenario on the finish of subsequent 12 months.                       

Ken Nopar is the vice chairman and senior philanthropic advisor for the American Endowment Basis (AEF) donor-advised fund.

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