Donor Advised Funds
Using a donor-advised fund (DAF) to enhance your charitable experience is quick, easy, and flexible. Planning with DAFs can enable significant tax benefits, allowing you to give more (and more thoughtfully) to the causes you care about.
The quick guide to DAFs.
A donor-advised fund, commonly called a DAF, is dedicated to your charitable giving. The fund is held and managed by GiftPact, a public charitable foundation.
Think of a DAF as your philanthropy hub—a base for supporting the causes important to you.
Opening a DAF involves making an irrevocable gift to GiftPact, for which you will receive a charitable tax receipt. You can contribute cash, securities, life insurance policies, and other assets that fall within our Gift Acceptance Policy.
Once you have opened your DAF, you can allocate your funds to any Canada Revenue Agency registered charity or qualified donee. DAF holders can choose to be identified by the receiving charity or remain anonymous.
A significant benefit of contributing funds to your DAF is that you get a tax receipt immediately and then can take some time to decide how you would like to distribute the funds to causes you care about.
Individuals, families, or even corporations can open a DAF. DAFs can be passed along to other family members or individuals, making them attractive for estate planning.
For more details, see a sample GiftPact Donor-Advised Fund agreement.
A practical alternative to a private foundation.
A DAF can be a smart alternative to starting and managing a private foundation. Here’s why:
- Lower administration: Setting up a Giftpact DAF is easier than setting up a bank account. Private foundations involve legal and administrative complexities.
- Minimum funding requirements: Private foundations can require a substantial endowment. DAFs require a much lower initial contribution.
- Flexibility and simplicity: DAF holders can donate a variety of assets, from cash and securities to life insurance policies. Private foundations have stricter non-qualifying investment rules. DAF holders are also less restricted when it comes to distributing funds to charities.
- Time and commitment: GiftPact handles all required administration of set-up, management, and disbursement of charitable funds. Private foundations require a lot more hands-on involvement related to regulatory and reporting requirements.
- Distribution: Canada Revenue Agency requires a mandatory 5% minimum distribution for private foundations. With a DAF, the 5% requirement applies to GiftPact Foundation as a whole, not your individual fund.
- Privacy: Donors using a DAF for their charitable giving can choose to remain anonymous to the charities they support. Private foundations must disclose their financial information publicly.
Is a GiftPact DAF right for you?
Donor-advised funds are ideal for people who:
- Want to streamline their charitable giving and take a more thoughtful approach to their philanthropy.
- Experience a significant taxable event such as a large salary bonus or the sale of a business or real estate and want to make a charitable contribution but undecided where to direct it.
- Regularly give to several charities throughout the year and want to reduce the paperwork, receipt collection and record-keeping involved.
- Prefer their philanthropy to be anonymous.
- Want to find tax efficiencies so they can maximize their charitable giving.
- Value multigenerational family giving and want a collaborative philanthropic tool.