Donor advised funds with our own Foundation

An easy way to make charitable gifts and save on taxes

By Ellen Weiss, TOP Jewish Foundation Executive Director

Do you make donations to several nonprofits and charitable organizations, including your synagogue? If so, then giving through a donor advised fund (DAF) might be the perfect way to enhance your charitable giving. Creating and using a DAF is easy and has many benefits — DAFs are a fantastic way to expand your ability to give donations to your favorite charities without the administrative hassle, while receiving significant tax benefits.

Do you have an upcoming plan to sell property or investments that could result in significant taxes? Using appreciated assets to fund a DAF helps to avoid capital gains taxes while supporting the nonprofits you love. The best gifts to make when setting up a DAF are donations of appreciated assets, including stocks, mutual funds, real estate and assets from the sale of a business.

Other forms of assets can be evaluated by TOP for their ability to be used as a donation to the DAF. One of the greatest benefits of a DAF is to contribute to the fund when it is most convenient for you, such as yearend or when you wish to sell an appreciated asset. All monies put into the fund qualify for a charitable tax deduction in the year the donation is given.

The best part of setting up a DAF is the donor’s ability to recommend distributions from the fund to charities of their choice. TOP’s fund holders have the flexibility to make these distributions on a recurring basis, anonymously, and include special instructions or notes to the charitable organization. TOP handles all the investment, administration and distributions from the fund on the donor’s behalf. Donors enjoy the convenience of making recommendations through TOP’s online portal, which is easy to use and accessible at any time. The actual distribution of checks from the DAF are made twice a month, but recommendations can be made at any time.

Creating a DAF with TOP Jewish Foundation is simple. For individuals and families, getting involved with TOP is like having a family foundation with less cost and more convenience. Donors select the name of their fund, which is typically their whole name or a family name. Additionally, donors choose the individuals who can make grant recommendations from their fund. This provides donors the option of including multiple generations in charitable giving. Using a DAF can involve the entire family and engage the next generations in philanthropy and the joy of giving.

Donors may want to add to their fund periodically or deposit a large amount at the beginning to last for many years of distributions. The minimum initial contribution is $10,000. As a way of encouraging philanthropy from younger donors, the minimum contribution for those 40 years and younger is $5,000. Gifts of $100 or more can be distributed from the DAF to the charities of their choice.

All assets are managed by TOP’s investment manager, Goldman Sachs. Donors choose how they want their fund invested by structuring their desired asset allocation among five investment pools. Goldman Sachs has implemented TOP’s unique investment policy that is pro-Israel and avoids investing in funds that conduct business in terrorist areas, with terrorist groups or that support the BDS (Boycott, Divestment & Sanctions) movement.

Most of TOP’s donors utilize the balanced investment pool, which maintains an active asset allocation of approximately 60% equities and 40% fixed income. Approximately 7% of the investments in the balanced pool are Israel bonds. Additionally, the balanced pool includes a portfolio that focuses on companies based in Israel or that do a substantial portion of their business with Israel.

For more information and advice on the best ways to enhance your philanthropic goals, contact me at ellen@topjewishfoundation.org or Director of Philanthropy Beth Levin at beth@topjewishfoundation.org, or call TOP Jewish Foundation at 813-961-9090.