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Donor-Advised Funds – do you have one?

Home Personal Finance and Budgeting Donor-Advised Funds – do you have one?

  • PhysicianOnFIRE PhysicianOnFIRE 
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    To the person wondering if their college in on the DAF list, I would be absolutely shocked if it was not.  Vanguard lets you put a donation to the attention of a certain person, plus category you want it donated towards, etc.

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    Any organization registered as a charity 501(c)(3) with an EIN is eligible. That’s nearly 2 million charities in the US. We donate to our kids’ elementary school PTO, local curling club, hospital, food shelf, soup kitchen, alma mater, and bigger national charitities that do good work in the US and across the world.

    I guarantee every college has a fund you can donate money to from a DAF. And pretty much any public high school, middle school, and grade school will have a fundraising arm of some kind  that will gladly accept your donations.

    40-something anesthesiologist and personal finance blogger @ https://physicianonfire.com [Part of the WCI Network] Find me on Twitter: @physicianonfire

    FIRE. Financial Independence. Retire Early.

    #111082 Reply
    Avatar ITEngineer 
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     I don’t mind some paperwork when moving securities, but I do mind it when moving cash, and the ease of cash transfers may be the dealbreaker when it comes to choosing between Fido and Schwab.

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    I have no problem transferring money from my bank to my DAF (1-2 business days) and they are not at the same institution. Hopefully I’m not reading your question wrong.

    #111090 Reply
    Avatar ITEngineer 
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    If you are close to the new standard deduction on the new tax law, you can alternate years contributing to charity. One year contribute $20,000, the next year $0. Take the deduction the $20,000 year and standard deduction the next year but have $10,000 per year to give away.

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    YES! For those of us who are not Doctors but still make nice salaries  😉 , this is a great strategy to lower your tax bill every other year. I’m even contemplating not buying tax software for the years I take the standard deduction.

    #111092 Reply
    Avatar artemis 
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     I don’t mind some paperwork when moving securities, but I do mind it when moving cash, and the ease of cash transfers may be the dealbreaker when it comes to choosing between Fido and Schwab.

    Click to expand…

    I have no problem transferring money from my bank to my DAF (1-2 business days) and they are not at the same institution. Hopefully I’m not reading your question wrong.

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    Thank you, that’s very helpful.  Paper checks still work, but why use one if the transfer can be made electronically without a lot of fuss?

    #111095 Reply
    Avatar Marko-ER 
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    I have had Fidelity DAF for 2.5 years.  Plan to itemize every other year, lump charitable contributions and distribute throughout the year where I don’t contribute.  I also plan to transfer some appreciated securities from Betterment (and vanguard) to Fidelity DAF like RogueDad.  Would specifying which specific securities to transfer (i.e. most appreciated ones), or JUST transfering one ETF help to avoid paperwork quagmire?  I found betterment folks pretty good and amendable to requests.

    #111097 Reply
    Avatar artemis 
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    Looks like Fidelity makes it a bit easier to move cash than Schwab does, so Fidelity may end up being my choice.  That you, everyone, for all your help!

    #111345 Reply
    Rogue Dad, M.D. Rogue Dad, M.D. 
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    I have had Fidelity DAF for 2.5 years.  Plan to itemize every other year, lump charitable contributions and distribute throughout the year where I don’t contribute.  I also plan to transfer some appreciated securities from Betterment (and vanguard) to Fidelity DAF like RogueDad.  Would specifying which specific securities to transfer (i.e. most appreciated ones), or JUST transfering one ETF help to avoid paperwork quagmire?  I found betterment folks pretty good and amendable to requests.

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    I tried to liquidate the entire account and transfer ALL of it to Fidelity — there should have been no guess work.

    Ultimately it sounded like the fractional ETF shares were the main issue — they couldn’t agree on whether they could accept them.  They kept changing their minds, kept punting responsibility on the transfer, etc.  Betterment was as helpful as could be expected for someone taking out all their $ in a rush at the end of a calendar year when I wasn’t exactly their biggest customer.

    If you are only transferring appreciated securities, but liquidating the entire position, I think you will be fine (except not whole shares).  If you are aiming to transfer specific SHARES that appreciated, I have no idea how Betterment or Fidelity handle that.

    I would imagine Betterment understands it all, but Betterment told me the transfer paperwork had to come to them through Fidelity, and I’m not sure Fidelity know what to do with requests to transfer specific shares of a specific holding.  They should know what to do, but my experience with them was not reassuring.

    http://www.RogueDadMD.com

    An alt-brown look at medicine, money, faith, and family

    #111527 Reply
    Avatar E5797 
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    Status: Physician
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    Joined: 01/31/2016

    If you want credit for your donation in the charity newsletter, for example, does using a DAF create any issues?

    If I donated to my hospital though a DAF, could the donation be listed as “Dr. and Mrs. E5797” or would it be listed as the fund name like “Dr. and Mrs. E5797 Fund” or what ever I’d decide to name the fund.  Maybe the charities ask how you want to be acknowledged.  I noticed a few donations in the latest hospital foundation newsletter as “Dr. and Mrs. XYZ Fund”.

     

    #197338 Reply
    Avatar wawot1 
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    Status: Physician
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    At Fidelity Charitable, you get to name your DAF whatever you want.  When it’s time to donate money, I believe there are options for anonymous or from the name of your DAF.

     

     

    #197344 Reply
    Liked by Vagabond MD
    Vagabond MD Vagabond MD 
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    alpha investing
    I noticed a few donations in the latest hospital foundation newsletter as “Dr. and Mrs. XYZ Fund”.

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    These were almost certainly from a DAF.

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

    #197353 Reply
    Avatar artemis 
    Participant
    Status: Physician
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    If you want credit for your donation in the charity newsletter, for example, does using a DAF create any issues?

    If I donated to my hospital though a DAF, could the donation be listed as “Dr. and Mrs. E5797” or would it be listed as the fund name like “Dr. and Mrs. E5797 Fund” or what ever I’d decide to name the fund.

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    That depends partly on how the newsletter decides to do things, and partly on what information you release when you make the grant recommendation.  When you set up a DAF you have to give it a name.  At Schwab Charitable (where I have my DAF), I have several options when I go to make a grant:  I cam make it completely anonymously, I can make it using only my fund name, or I can make it using my personal name and my fund name.  If I choose to use my fund name or include my personal name, I can also choose to supply the charity with a contact address.  So depending on how much information I choose to release, the charity newsletter may or may not be able to thank me personally.

    That’s one of the nice things about a DAF:  you control the amount of information being released, and if you choose a fund name that doesn’t include any part of your own name, you can give semi-anonymously.  The charity can learn that “The Happy Giver Fund” is a regular donor, without knowing who’s behind “The Happy Giver Fund” or how to directly contact that person.  Or they can receive a check from the DAF with only the DAF name on it, with the donor being completely anonymous.  Or they can receive all the information they’d get if you wrote them a personal check or contributed with a credit card.  It’s all up to you!

    #197448 Reply
    Lordosis Lordosis 
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    I use vanguard brokerage.  I wish their DAF had lower minimums.  Does anyone use Vanguard for their brokerage but Fidelity or Schwab for their DAF?  Is it any more difficult to transfer funds?

    “Never let your sense of morals prevent you from doing what is right.”

    #198159 Reply
    Avatar artemis 
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    I use vanguard brokerage.  I wish their DAF had lower minimums.  Does anyone use Vanguard for their brokerage but Fidelity or Schwab for their DAF?  Is it any more difficult to transfer funds?

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    Sorry for the very late reply; I just saw this post.  I opened my DAF with Schwab Charitable, but use Vanguard for my brokerage.  I haven’t found it too difficult to transfer funds from Vanguard to Schwab; I have to print out a statement from Vanguard to prove to Schwab that I have enough funds in my account to make the desired transfer, fill out a transfer form, and send the form and the printout off to Schwab.  Two or three weeks later the transfer is done.  Obviously it’s not as easy as it would be if I held both the DAF and my investment accounts at the same institution, but it’s not really difficult. (Best to do the transfer when the DAF isn’t too busy – in other words, not at the end of the year, and not during tax season.)

    #220869 Reply
    Liked by Lordosis
    PhysicianOnFIRE PhysicianOnFIRE 
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    Status: Physician
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    Joined: 01/08/2016

    I use vanguard brokerage.  I wish their DAF had lower minimums.  Does anyone use Vanguard for their brokerage but Fidelity or Schwab for their DAF?  Is it any more difficult to transfer funds?

    Click to expand…

    Sorry for the very late reply; I just saw this post.  I opened my DAF with Schwab Charitable, but use Vanguard for my brokerage.  I haven’t found it too difficult to transfer funds from Vanguard to Schwab; I have to print out a statement from Vanguard to prove to Schwab that I have enough funds in my account to make the desired transfer, fill out a transfer form, and send the form and the printout off to Schwab.  Two or three weeks later the transfer is done.  Obviously it’s not as easy as it would be if I held both the DAF and my investment accounts at the same institution, but it’s not really difficult. (Best to do the transfer when the DAF isn’t too busy – in other words, not at the end of the year, and not during tax season.)

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    Glad to hear it’s feasible, but, man… 2 to 3 weeks is a really long time. I can’t imagine why it would take more than 2 to 3 days. It should be an ACH transfer.

    I still have both Vanguard and Fidelity DAF even though I prefer the Fidelity DAF. But I may keep the Vanguard Charitable DAF for the ease of transfer.

    Thanks for the update.

    Cheers!
    -PoF

    40-something anesthesiologist and personal finance blogger @ https://physicianonfire.com [Part of the WCI Network] Find me on Twitter: @physicianonfire

    FIRE. Financial Independence. Retire Early.

    #221152 Reply
    Avatar artemis 
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    Status: Physician
    Posts: 540
    Joined: 12/02/2016

    Glad to hear it’s feasible, but, man… 2 to 3 weeks is a really long time. I can’t imagine why it would take more than 2 to 3 days. It should be an ACH transfer.

    I still have both Vanguard and Fidelity DAF even though I prefer the Fidelity DAF. But I may keep the Vanguard Charitable DAF for the ease of transfer.

    Thanks for the update.

    Cheers!
    -PoF

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    I just remind myself that a transfer of appreciated securities is something I will only be doing once a year (or possibly even less often).  That makes the wait more bearable.  But like you, I do wonder why it can take so long.

    It would certainly be nice to be able to transfer things online with just a mouse click. If Vanguard’s DAF account minimums (both for setting  the account up, and for grants) weren’t so high, I’d definitely would have opened my DAF there.

    #221265 Reply

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