Christian Donor Advised Funds: Align Your Giving and Your Values

The Signatry is a Christian donor advised fund sponsor that facilitates radical biblical generosity to help donors maximize gifting opportunities through strategic giving plans. A donor advised fund can provide you with new, more flexible giving tools to pursue your generosity goals for 2023.

A donor establishes a donor advised fund (DAF) by making a tax-deductible donation to a qualified 501(c)(3) DAF sponsor like The Signatry. The sponsor has legal control over the fund and gives the donor advisory privileges to recommend how those dollars are granted out to other nonprofit organizations over time. Donors can also recommend investments within the donor advised fund in order to grow the fund balance over time.

A Christian donor advised fund: Does it matter?

One significant question to ask if you are considering creating a donor advised fund is: Does this DAF sponsor align with my values?

Because The Signatry’s ministry is to be a Christian donor advised fund sponsor, every member of our staff you interact with during the giving process shares your commitment to investing in God’s Kingdom. Each of our standard investment pools screens for biblically responsible investments (visit our Investments page to learn more). You will also be joining a community of other faith-focused donors. Together, we all share the vision to solve the world’s greatest problems and spread the hope of the gospel to all.

Donor advised fund: An old idea, newly popular

Donor advised funds have seemed to explode on the charitable giving scene in just a few short years. From 2003 to 2013, there was a whopping 186% growth in donor advised funds. In 2021, the donor advised fund world reached $234.06 billion in assets, a 39.5% increase from 2020.

While donor advised funds have seen a rapid expansion in recent years, their history goes all the way back to 1931, when the New York Community Trust established the first donor advised fund. Unlike previous community foundations, which relied on joint decision-making to grant out funds, these donor advised funds allowed individual donors to recommend grants to support causes they valued. This innovation caught on, spread to other communities, and now includes a number of prominent nonprofit organizations who operate as donor advised fund sponsors nationwide. The Signatry is a donor advised fund sponsor that works to inspire and facilitate generosity, allowing our fundholders to support the causes they care about and join a community of like-minded, generous families.

 

Donor advised funds versus private foundations

Aspiring philanthropists must consider their values and generosity goals as they choose what giving tools to use. For example, private foundations are another common philanthropic tool that offers different costs and opportunities than does a donor advised fund. Some donors may decide that a foundation better fits the values they wish to live out with their giving. But since establishing a private foundation can be a lengthy, cumbersome, and expensive process, many donors seek a simpler tool. For most givers, using a donor advised fund at The Signatry is an easy alternative to a private foundation for the following five reasons:

1. Donor advised funds are simple. Donor advised funds with The Signatry are simple to set up and maintain. You can open an account online (or call 913-310-0279). You can coordinate all your charitable contributions and grant recommendations in one online portal. (And you can always call our donor care specialists for support.)
2. Donor advised funds simplify tax filings. Unlike a private foundation, your donor advised fund will not require a separately filed tax return. Your contributions into a donor advised fund are generally tax deductible, and you will receive an annual statement showing all your contributions at the end of the year.
3. Donor advised funds offer tax benefits. When supporting a private foundation, donors may generally deduct up to 30% of adjusted gross income (AGI) for cash gifts and 20% of AGI for noncash gifts. However, when contributing to a donor advised fund, donors may generally deduct up to 60% of AGI for cash gifts and 30% for noncash gifts. Using a donor advised fund enables you to direct more of your income toward your favorite causes.
4. Donor advised funds cost less to maintain. In a private foundation, a portion of the donor’s contributions to the foundation will likely go toward the administration and upkeep of the foundation: this can include legal and accounting fees for incorporating and ongoing fees for accounting and administration. On the other hand, donor advised fund sponsors like The Signatry are responsible for handling the administrative costs of maintaining the fund and sending grants to the donor’s recommended charities. The only thing you must do is log into your account to contribute funds or recommend a grant; our team will handle the paperwork.
5. Christian donor advised funds offer community and creativity. By joining a Christian donor advised fund organization, Christians find the opportunity to solve problems together and celebrate together. And when Christians gather, the creative energy of God’s people leads to new and creative ways to give and share Christ’s heart with the world.

For a philanthropist looking to make a difference, donor advised funds typically offer lower costs and greater tax benefits than private foundations. You can give more and spend more time understanding the causes you value, rather than spending some of that time and money on maintenance.

Because they are easy and cost-effective to maintain, donor advised funds are also an efficient, effective option for almost any giver who want to maximize what their charitable dollars can do. Donor advised funds typically cost very little to open and have low minimums. They’re part of the growing trend of making giving mainstream. Find out how to open a fund today. 

 

Originally Published June 21, 2018.