As the world transitions from COVID-19 to the developing humanitarian crisis in Ukraine, it is clear how quickly needs can change. Americans know that dire situations can overtake a community in hours and stand ready to help with shifting charitable needs. Many generous donors prepare to rise to the challenge by contributing to charitable savings accounts. Like a rainy-day fund committed to charitable giving, they allow philanthropists to ease unforeseen suffering.
One relatively new donation mechanism that allows for expedited crisis relief is the donor-advised fund (DAF). This charitable giving account allows for individuals outside of the top one percent to contribute meaningful donations to those in need and invites a variety of donors to assist with the world’s constantly changing needs.
DAFs are wildly popular as they allow donors to contribute as much as they want annually into an account, which is irrevocable dedicated to 501(c)(3) charities. Since their introduction in the philanthropic world, these funds hold $142 billion in assets with distributions to charities averaging around 20 percent per year, far higher than the 5 percent required for private foundations.
Read Full Article »