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This is great advice. Other advantages of DAFs: - Super easy donation process - log in, search for the nonprofit you want to give to, click a couple buttons an
by alexhutcheson 7y ago
This is great advice. Other advantages of DAFs:
- Super easy donation process - log in, search for the nonprofit you want to give to, click a couple buttons and you're done. Even lower friction than going to the nonprofit's website and entering credit card info.
- If you don't already itemize your tax deductions every year, you can "bunch" several years of charitable giving into one year by contributing in advance for future years. For example, if you plan to donate $5k per year, you can contribute $15k to your DAF this year, but grant $5k out of the fund each year. You can itemize the contribution in the first year, while taking the standard deduction in the 2nd and 3rd years.
- Fewer things to track and list when you do your taxes. You only need to report your contributions into the DAF (often 1 or fewer per year), so you no longer have to scour your records and record each individual charitable donation you made.
[not an accountant nor a lawyer, not tax or investing advice]
Vanguard, Schwab, and Fidelity all have low-cost DAF options that you can set up online in a couple minutes. Annual fees, minimum contributions, and minimum grants vary by provider so it's worth doing a little bit of research.
- stephencanon 7y agoThe point about "bunching" donations is really interesting, and a very savvy option for people whose annual donations are a little below the threshold for itemizing deductions. Thanks for pointing that out!