Housed at the Jewish Federation, the Center for Jewish Philanthropy manages over 900 donor advised funds, assisting close to 2,000 generous individuals reach their philanthropic goals. A donor advised fund is an easy-to-use charitable giving fund that can simplify and streamline individuals’ and families’ giving. Donors can support Jewish and secular charities in Chicago, the United States, and around the world.

With over 900 funds, there are just as many unique, powerful stories as to why each fund was established. Funds are opened for a wide range of reasons, including in memory of a family member, in honor of a b’nai mitzvah or a wedding, or to pass on the value of tzedakah to future generations. In addition to these motives, opening a donor advised fund is a prudent financial choice, enabling donors to reach their highest charitable potential.

According to the most recent Giving USA report, charitable giving in the United States was over $373 million in 2015 and one of the fastest growing vehicles for philanthropy is a donor advised fund. A DAF has many financial benefits, the most noteworthy being that donors have control of the timing of their charitable deductions. When cash or appreciated securities are contributed to the fund, an immediate tax deduction is received for that year — and contributions of appreciated securities allow donors to gain the additional advantage of avoiding capital gains tax. Donors receive the direct benefit of a tax deduction in the year they contribute assets with the freedom to continue their charitable giving into the future, something especially helpful for those who may be retiring or are expecting a reduced income.

Financially minded givers will find that a donor advised fund through the Jewish Federation offers many monetary benefits in addition to the emotional reasons for giving. All charitable dollars contributed are invested tax free and donors have the option of investing in a wide range of vehicles, ranging from low risk money market type accounts to potentially higher yielding mutual funds and the Federation’s diverse, in-house endowment portfolio. Fund holders with more than $250,000 can also recommend that an approved, independent investment advisor manage the assets, giving the flexibility to continue working with a trusted financial advisor.

A low $1,000 initial gift allows a personally named donor advised fund to be opened at the Jewish Federation, though some donors may not start their family’s philanthropy with a donor advised fund. Take one generous, financially savvy and philanthropic family, for example:

This family owned a lucrative business and gave a share of the company to the Jewish Federation in order to establish a donor advised fund. Giving these types of assets to a public charity is advantageous because, for a contribution of a closely held asset, a donor can deduct the full fair market value of the asset, in contrast to only deducting the cost basis of the asset were it gifted to a private foundation.

After using their DAF at the Jewish Federation for a while, the family decided to close their private foundation and add those assets to the donor advised fund. By putting the entirety of their philanthropic dollars into the DAF, the family has the convenience of handling all of their giving in one location. Also, unlike a private foundation, which must be established as a non-profit entity and requires a yearly tax return and audit, a donor advised fund has no such administrative burdens.

At the Center for Jewish Philanthropy, our core value is encouraging that the important values of tzdedakah be passed on l’dor v’dor, from generation to generation. This family has done just that by also establishing funds for each of their children to pursue and support their own charitable interests.

Our staff would love to hear your family’s story, to be a partner in your charitable giving, and to support you in reaching your philanthropic goals. Please contact me at (312) 357-4719 or [email protected] to hear more about how a donor advised fund can be the ideal vehicle for your charitable giving.

Amy Saltzman is endowment associate of Donor Advised Programs for JUF’s Legacies and Endowments.