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Donor Advised Fund: Asset allocation

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  • Avatar runfast00 
    Participant
    Status: Physician
    Posts: 18
    Joined: 07/23/2018

    I started a DAF with Vanguard Charitable in 2018.  Current assets allocation is 100% Total stock market.

    We give “x” every year and I donated 2x at the end of 2018.

    I plan on donating about 2-3x every 2 years.

    I donate from my Taxable account at Vanguard. I use it for rebalancing my portfolio (getting rid of an old Wellington Mutual fund that had some capital gains) so I can use more VTI and VTSAX in my taxable account

    Interestingly enough the market has appreciated so much in the 1st has of 2019 that I have another 1/4 x to give to charity.

     

    My goals (give anonymously, sell of taxable account by donation, get the standard tax deduction every other year, and see appreciation in value of my DAF) are all currently met by Vanguard.

    My question involves allocation.

     

    I currently have 100% total US stock market.  Is this wise? Is there a role for some bonds, say ‘x’ amount of bonds so that I could still give from my DAF without having to sell stocks.

    I imagine some of these answers are similar to spending in retirement.

    What are other people doing in their DAF?

     

     

     

    My goal (in addition to asset protection

    #233266 Reply
    Avatar artemis 
    Participant
    Status: Physician
    Posts: 588
    Joined: 12/02/2016

    I have about 60% stocks and 40% bonds in my DAF.  I think the key question to ask yourself is how would you react if the stock market took a nosedive.  Would you be willing to cut back your annual giving or to shovel some more assets into the DAF to make up for a shortfall?  If the answer to either of those questions is “yes,” an aggressive stock allocation is probably fine.  But if you want to be sure you’ll be able to give X amount from the DAF per year, you probably want a less aggressive asset allocation.

    #233283 Reply
    Liked by EndoRobert
    Vagabond MD Vagabond MD 
    Participant
    Status: Physician
    Posts: 3469
    Joined: 01/21/2016

    I am 75:25 in my DAF. I chose that allocation about 15 years ago and have stuck with it.

    "Wealth is the slave of the wise man and the master of the fool.” -Seneca the Younger

    #233356 Reply

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