An important first step in creating any multi-generational philanthropy plan is to organize your charitable giving. A family Donor Advised Fund (DAF) at CFHZ is one good option.

The process of organizing charitable giving itself creates much-needed clarity around your family’s philanthropic purpose. Without an organized approach to family giving, it is easy for children and grandchildren to get confused about their parents’ and grandparents’ processes for making decisions about which nonprofits to support.

CONSIDER THIS SCENARIO:

A local entrepreneur spent years making charitable gifts to human service organizations. She wanted to strengthen the community that had been a big part of making her business so successful. Upon the sale of her company, the entrepreneur formed a family donor-advised fund. This process helped her to facilitate a conversation with her children about her giving priorities, and her desire for them to join her in supporting the organizations that were close to her heart, while also adding causes and organizations that her children felt called to support.

DAFS AND MULTI-GENERATIONAL GIVING

Establishing a fund at CFHZ can be a very effective solution for families who are launching a multi-generational giving strategy.

• Community foundation vehicles are extremely flexible and can be used to engage an extended family in the process of charitable giving. Donor-advised funds, for example, are popular because they allow a donor to name children and grandchildren as successor advisors.
• When a donor organizes their charitable giving through a Community Foundation fund, they can make a large transfer of cash or marketable securities that is immediately eligible for a charitable deduction. The donor can recommend gifts to favorite charities from the fund when the time is right. This is especially useful in the case of donors who sell a business or for another reason experience a large influx of taxable income in a single tax year.
• Establishing a donor-advised fund at the Community Foundation can be a much better choice for family-oriented donors than a donor-advised fund offered through a brokerage firm (such as Fidelity or Schwab). That’s because, at CFHZ, donors and their children and grandchildren, are part of a community of giving and have opportunities to collaborate with other donors who share similar interests.
• The Community Foundation can work with a donor and the donor’s family on a charitable giving plan that extends for multiple future generations. That is because the experienced team at CFHZ supports strategic grant making, family philanthropy, and opportunities to gain deep knowledge about local issues and nonprofits making a difference.
• Finally, CFHZ’s tools and resources make it much easier for donors to communicate across generations about the family’s charitable giving purpose and goals for long-term impact.

We welcome the opportunity to work with you to establish an enduring and rewarding family philanthropy program that is customized to meet your unique purpose!

We always encourage donors to first seek the advice of their legal, financial, or tax advisors when considering a gift of non-cash assets. While our team does not offer tax advice, we stay knowledgeable on charitable giving strategies. Please contact Colleen Hill, Vice President of Development & Donor Services, at chill@cfhz.org or by calling 616–994–8853 if we can help you serve your clients.