Giving through a Donor Advised Fund

A donor advised fund (DAF) is a charitable giving vehicle wherein an individual, family, or corporation makes an irrevocable, tax-deductible contribution of cash, securities, or other property to WELS Foundation and at any time thereafter can recommend grant distributions to qualified WELS ministries. The fund can be established with current gifts, deferred gifts (such as charitable gift annuities and charitable remainder trusts), and testamentary gifts (such as wills, revocable trusts, or beneficiary designations for life insurance policies or retirement accounts).

The WELS Foundation DAF program provides an alternative to the private family foundation. You can accomplish many of the same goals, but with far less administrative work and expense.

What are the features?

  • Gift size. The minimum initial gift is $10,000. Donors can add funds in $100 increments at any time.
  • Individual. You may name your DAF. You, or the persons you designate, may recommend distributions to organization listed in the WELS Yearbook from your fund—anonymously if you so choose.
  • Grant recommendations. The minimum amount that may be recommended is $250. Each fund must distribute at least five percent of its asset value annually.
  • Lasting legacy. You may designate others to continue recommending distributions after your lifetime (usually for a period of 20 years).

What are the benefits?

  • Joy. Arrange to benefit the areas of the Lord’s work that are closest to your heart.
  • Tax savings. You receive an income tax charitable deduction in the year of your gift to your DAF, regardless of when grants are made. As with all gifts of long-term appreciated securities, none of the appreciation is subject to capital gains tax.
  • Recommend gifts when ready. Contribute to your DAF this year and decide later which WELS ministries you want to support.
  • Encourage family stewardship. Help your children and other loved ones experience the joy of giving by involving them in the decision making process for the grant recommendations.

Larry and Marie Clark (names changed to protect donor confidentiality) opened a DAF as a way of making more tax efficient gifts. They work in agri-business and arranged that the proceeds from a certain crop are paid directly to the DAF. What these donors especially like about this arrangement is that each dollar earned and given to their DAF is able to be used for ministries within WELS. Since the amount going into their DAF is not taxed, it has allowed this family to generously increase their offerings. When the check is paid to their DAF, they consult with their WELS Christian giving counselor and make a list of ministries they would like to support. This list is passed on to WELS Foundation, which distributes the money from their DAF according to their wishes. These donors are very pleased with this arrangement and would recommend this method of gifting.

For more information regarding setting up a donor advised fund, contact a WELS Christian giving counselor by calling 800-827-5482.