The Growing Importance and Impact of Donor Advised Funds

The Growing Importance and Impact of Donor Advised Funds

Most people don’t know what a donor-advised fund (DAF) is. But individuals and communities understand what these funds can do–both directly and indirectly. A DAF is a flexible philanthropic tool for donors seeking to be involved in making decisions about how their gifts are distributing over time, offering advice to the Community Foundation on how the dollars should be directed to make an impact in the community.

These funds provide opportunities for Mississippians across a wide range of income levels to strategically plan their giving over time. Donors can work closely with Community Foundation staff to identify the best ways to ensure the causes they care about get the sustained support they need to make a difference.

The Council on Foundations likens DAFs to a “community savings account,” which is a pretty accurate description. Donors who choose DAFs as the vehicle for their charitable giving are able to work with other donors, community members, and nonprofit organizations to respond quickly to issues that arise all of a sudden. From natural disasters to much-needed development, DAFs provide donors, and by extension the community, the flexibility needed to address areas of concern in the community.

DAFs also encourage lasting civic engagement since donors, and many times their family members, are involved in planned strategic giving. This level of engagement can lead to long-term community involvement that lasts generations.

An additional benefit of DAFs is their durability. During the Great Recession, DAFs allowed community foundations to sustain and even increase charitable giving at a time when individual giving plummeted and communities were most in need. Donors can work hand-in-hand with the Community Foundation to plan how the causes they care about will receive the support they need for years in the future, providing the type of continuity and consistency nonprofits need to be effective over the long-term.

If you have questions about DAFs or want to learn more about how the Community Foundation can help you meet your philanthropic goals, give us a call at (601) 974-6044.