Donor-advised Funds

Donor-Advised Funds (DAFs) are one of the fastest-growing ways in the U.S. to manage your charitable giving.  Here, we cover some basic questions about giving to Pals through a DAF.  You can find in-depth information about DAFs online.

What is a DAF?  A donor-advised fund is an account managed by a special charitable entity set up for this purpose.   Financial companies, such as Schwab, Vanguard, and many others establish these “charitable sponsors” to help their customers manage donations efficiently and in a tax-effective way.  Ask your financial company if it has a charitable sponsor offering DAFs.

Are there tax benefits?  Because we cannot give tax advice, we recommend that you consult with your tax advisor about the impact of a DAF before opening an account.  For example, your donation may be tax-deductible, pursuant to applicable laws, in the year you contribute to the DAF, even if the contributed amount is not fully paid out to your favorite charities until later years.  Also, for appreciated capital assets that you contribute to a DAF, there may be capital gain tax benefits.   These are important tax issues to discuss fully with your tax advisor.

How do I start?   After comparing DAF arrangements offered by a few financial companies you like, decide where you want to establish your DAF.

The next step is to contribute assets to fund your giving priorities. Your contributions to the DAF may include cash, securities, and appreciated assets–even real estate.

Once your DAF account is funded, you can recommend grants to your favorite charities for years to come, on a schedule you choose.

You can even use a DAF as part of your overall estate planning. For example, you can recommend PMP Pals as the beneficiary of your remaining DAF balance at death.  DAF charitable sponsors often have extensive information on their websites to help you make the most of your DAF, including estate planning considerations.

How does money get from my DAF to PMP Pals?  You decide when to recommend that the DAF make a grant from your account to a US qualified charity – like PMP Pals.  This is usually done through an online account portal.

Each portal is slightly different, but you will be asked to state the amount of the grant you want the DAF to distribute, as well as identifying information for the charity.  Here is PMP Pals’ identifying information:

Formal name of charity: PMP Pals

IRS tax ID number: 47-3524658

Mailing address:   PMP Pals

P.O. Box 166

Manchaca, TX  78652

Purpose of the grant:   PMP Pals suggests using a flexible description, such as “wherever most needed.”

Make this a recurring grant – Yes/No:   PMP Pals appreciates when donors say “Yes” to recurring grants from their DAF accounts.  A recurring grant provides a stream of funding to support our programs throughout the years.

What happens next?  The DAF charitable sponsor will review your information and, after verifying that the charity meets the eligibility requirements, it will mail a check directly to your recommended charity.

How will I know when PMP Pals has received the distribution?  A charity usually will receive payment within about two weeks after you give the DAF all the necessary information.  Along with the check, the DAF will inform PMP Pals that the grant is from a DAF.  When authorized, the DAF will also give us your name and contact information.    We hope that you will authorize the DAF to identify you to us – we’d like to let you know when we receive the grant and send you a heartfelt “thank you.”   For anonymous donors, please know that PMP Pals appreciates your support for our work.

I’d like to talk to someone at PMP Pals about giving.   Our Treasurer will be happy to help you.  Please contact Charmaine at business@pmppals.net.