Donor Advised Funds v. Charitable Foundations

 

Lauren Janus

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Maybe you’re tired of making one-off donations to a string of charities. Or maybe you’re keen to involve children or other family members in your giving, make it more meaningful and more…well, thoughtful.

Whatever your reason for wanting to formalize your giving, you’re in luck, because there are two great ways to structure your personal charitable giving.

Donor advised funds (DAFs), sometimes called ‘charitable giving accounts’, are growing in popularity in the UK. They’re low-hassle, tax-friendly ways to set aside money for charitable giving.

By contrast, charitable trusts or foundations are a bit more old-school. They are actual charities with a board and reporting requirements, but they can also offer more control over exactly what your money is used for. Both are good options for people wanting to be more strategic with their giving. Here’s some of the differences:

DAFs v Foundations by Lauren Janus

Ready to get started? There’s a growing number of both charities and for-profit organisations that offer donor advised funds in the UK. Charities Aid Foundation offers what they call a ‘charitable trust,’ and PrismNational Philanthropic Trust-UK and Foundation Scotland all offer their equivalent of a donor advised fund. On the for-profit side, UBS has recently launched its own DAF.

If you decided a foundation’s the way to go, you’ll want the help of a professional as there’s some administrative set-up required. You can talk with your accountant or wealth adviser for this. Another option is to turn to a charity like Giving Works or a community foundation that specialises in managing the reporting and administrative responsibilities of private foundations.

Whatever you decide, enjoy your passage to more strategic–and hopefully a lot more meaningful–charitable giving.

Lauren Janus is an Independent philanthropic adviser at Thoughtful Philanthropy.


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