Episcopal Church Foundation Vestry Papers - for leading congregations

My wife and I opened a Donor Advised Fund this year and it has changed our relationship with charitable giving.

My first question when our financial advisors recommended that we use a Donor Advised Fund was: What is a Donor Advised Fund?

In short, a Donor Advised Fund is an account that you open with a charitable foundation (including the Episcopal Church Foundation!*) to manage your giving. You give to the Donor Advised Fund when it makes sense for you to do so, usually for tax reasons, and then you “advise” the foundation when you want to disburse some or all of those funds to a charitable organization like your parish church. Donor Advised Funds are especially helpful if your income varies from year-to-year but you want to offer consistent support to your church – we should all want to give generously and consistently to our churches! – and to the other organizations you care about.

My second question was this: Why do we need a Donor Advised Fund?

We’re upper middle-class folk. We give generously within our means, but our gifts were such that it seemed easy enough just to write a check or give online. This kind of a tax dodge didn’t seem worth the hassle.

Yet, the most wonderful thing happened when we opened our Donor Advised Fund, even within our means: Giving generously became a lot easier.

Before we had a Donor Advised Fund, we had an annual giving budget. In the same way that we figured out how much we could afford to spend on daily expenses, or travel, or home repairs, we also figured out how much we could afford to give to our church and to charity. But, when we gave, the balance in our checking account still came down. We still had to be careful.

Our Donor Advised Fund changed all that.

Now, we make a big gift to our Donor Advised Fund every year or two, usually when our tax advisors tell us that it makes the most sense for us to do so and often by donating stocks that would otherwise generate capital gains taxes. Then, we give that money away over time. No longer do we need to decide if we can afford to make a gift. No longer do we need to weigh our charitable giving against our other upcoming expenses or think about cash flow. We know how much we have available to give and we know that we are going to give it all away.

For us, a Donor Advised Fund changed the question from “will we give this gift” or “can we give this gift” to “where will we give this gift.” That has made all the difference.

* For more information on a DAF through the Episcopal Church Foundation, see the ECF website here or contact Yvonne Lembo, Director of Development at [email protected].