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Giving back is great for the community. But did you know that it could also be great for your wallet? 🤯
We invited @adamnash, CEO and co-founder of @DaffyGiving, to share how donor-advised funds (DAF) can support your favorite causes, & why they can benefit you on #tax day.
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We invited @adamnash, CEO and co-founder of @DaffyGiving, to share how donor-advised funds (DAF) can support your favorite causes, & why they can benefit you on #tax day.
🧵
So, what is a DAF?
A tax-advantaged financial account dedicated to charity. Think of it like a 401K but for giving back to the community.
They allow you to contribute assets into an account, invest those assets to increase their impact, and then donate to any legal US charity.
A tax-advantaged financial account dedicated to charity. Think of it like a 401K but for giving back to the community.
They allow you to contribute assets into an account, invest those assets to increase their impact, and then donate to any legal US charity.
Why do we at Secfi love DAFs?
Easy to set-up and very low-cost
Contribute with a variety of assets (stocks, ETFs, crypto, or cash)
Disburse funds to charities over a multi-year period
Tax deduction in the year you fund your DAF
No hassle of tracking donation receipts
Easy to set-up and very low-cost
Contribute with a variety of assets (stocks, ETFs, crypto, or cash)
Disburse funds to charities over a multi-year period
Tax deduction in the year you fund your DAF
No hassle of tracking donation receipts
Haven’t heard of a DAF?
Here’s why:
DAFs have been almost exclusively marketed to the ultra-wealthy, because the largest providers in the country are supported by investment management companies whose business models only allow them to focus on accounts of $100K or more.
Here’s why:
DAFs have been almost exclusively marketed to the ultra-wealthy, because the largest providers in the country are supported by investment management companies whose business models only allow them to focus on accounts of $100K or more.
And that’s what Daffy is hoping to change.
This brand-new DAF platform is built from the ground up for giving with no asset-based fees, and it’s available to anyone and everyone who wants to participate.
This brand-new DAF platform is built from the ground up for giving with no asset-based fees, and it’s available to anyone and everyone who wants to participate.
Like your 401K, you simply open a DAF and start contributing — even complex assets like stocks and crypto.
The money you contribute is then invested and has the potential to grow, but you ALSO get an immediate tax deduction, as you would when donating directly to any nonprofit.
The money you contribute is then invested and has the potential to grow, but you ALSO get an immediate tax deduction, as you would when donating directly to any nonprofit.
Simply put, it’s a better system for giving.
With a DAF at your fingertips, you can automate your contributions and recurring donations to your favorite organizations while keeping all your receipts in one place for tax season.
AND, there are tax benefits in it for you:
With a DAF at your fingertips, you can automate your contributions and recurring donations to your favorite organizations while keeping all your receipts in one place for tax season.
AND, there are tax benefits in it for you:
1. Gifting appreciated securities
If you have any assets, like individual stock positions or crypto, you may have purchased those years ago at a very low cost. For any that you’ve held for longer than a year, you can contribute them to a charitable organization.
The benefits?
If you have any assets, like individual stock positions or crypto, you may have purchased those years ago at a very low cost. For any that you’ve held for longer than a year, you can contribute them to a charitable organization.
The benefits?
Never pay capital gains taxes on the appreciation of your investment.
Get an income tax deduction on the fair market value of your investment on the date you contribute.
Nonprofits don’t have to pay taxes to liquidate your gift — so the full amount goes to supporting the cause.
Get an income tax deduction on the fair market value of your investment on the date you contribute.
Nonprofits don’t have to pay taxes to liquidate your gift — so the full amount goes to supporting the cause.
2. Bunching 2+ years of contributions
Most taxpayers don’t receive any tax benefits for their annual donations and only claim the standard deduction on their tax returns:
$12,950 for single filers and
$25,900 for couples filing jointly
Most taxpayers don’t receive any tax benefits for their annual donations and only claim the standard deduction on their tax returns:
$12,950 for single filers and
$25,900 for couples filing jointly
By bunching 2+ years of charitable contributions into a single tax year, you could qualify for itemized deductions.
Startup employees who may have found themselves in a higher tax bracket (RSU vesting, NSO exercising, etc.) can also use bunching to reduce their tax burden.
Startup employees who may have found themselves in a higher tax bracket (RSU vesting, NSO exercising, etc.) can also use bunching to reduce their tax burden.
3. Support unlimited organizations, your way
Flexibility is a huge benefit of a DAF. You decide how much you want to donate every year and which charities you want to support.
Flexibility is a huge benefit of a DAF. You decide how much you want to donate every year and which charities you want to support.
For example, if you have 100 shares of Apple stock to donate, dividing them across multiple orgs is a lot of work.
If you contribute them to a DAF, then you can easily give any amount of cash to each organization.
If you contribute them to a DAF, then you can easily give any amount of cash to each organization.
Plus, any funds you don’t intend to give right away, you can reinvest them to have more to give in the future.
Giving back really is a win-win for your causes and your wallet. And there’s still time for you to take advantage this year!
Daffy is offering our readers an extra $25 to your charity of choice by signing up at the link below:
www.daffy.org/secfi/invite
Daffy is offering our readers an extra $25 to your charity of choice by signing up at the link below:
www.daffy.org/secfi/invite
None of this should be taken as financial, tax, or legal advice. We always recommend speaking with a licensed financial advisor first.
Our financial advisors can answer all your questions and help you #knowyouroptions, whether you’re heading for an IPO or just joined a startup.
Our financial advisors can answer all your questions and help you #knowyouroptions, whether you’re heading for an IPO or just joined a startup.
Want to see more on year-end #tax strategies?
Subscribe to see more from our team of finance professionals and equity experts along with special guests:
www.secfi.com/founders-and-funders
Subscribe to see more from our team of finance professionals and equity experts along with special guests:
www.secfi.com/founders-and-funders
