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Abstract: 

Both donor-advised funds (DAFs) and private foundations (PFs) can be remarkable tools for philanthropic individuals. Which is the best fit given a family’s specific assets and philanthropic aspiratons? Each tool offers its own advantages and disadvantages. This article examines a number of considerations relevant to the choice between a DAF and a PF, including: Assessing your client’s philanthropic goals and desires; Family legacy and generational planning; Funding issues and asset characteristics; Management and governance; Investment policies and implementation; Grant vetting, selection, and assessment; Filing and tax compliance requirements; and Overall comparison of entities and appropriate use. An updated version of this article, including options for the Supporting Organization entity, is available in Family Foundation Advisor Volume 20, Number 5 (July-August 2021), and can be accessed at https://www.civicresearchinstitute.com/online/article_abstract.php?pid=8&iid=1611&aid=10050.

Keywords: planning horizon; emerging themes and tendencies; gifting mechanisms; value-added characteristics of philanthropy; Income-Tax Deduction; Economic Savings; capital gains; IRC §4943; jeopardizing investments; IRC § 4944; IRC § 4943; Form 990-PF

Affiliations:  1: Healy Partners; 2: The Dallas Foundation.