Donor-Advised Funds: Your Questions Answered
A conversation with longtime VPL Foundation supporters Doug and Sheila about Donor-Advised Funds
Q: Are you library users yourselves?
A: Absolutely. We’re frequent borrowers of books. Everything from travel books before a trip to fiction you won’t always find on bestseller lists. We also use Libby quite a bit, especially when travelling. We feel lucky to live near the Central Branch, it’s always felt like our home library.
Q: When did you begin supporting the VPL Foundation?
A: In 2013. The same year we set up our Donor-Advised Fund. By then we’d lived downtown for about five years and saw firsthand how important the library is to the community. It felt like a natural place for us to focus our giving and strengthen the community we’re a part of.
Q: Why does supporting the Library matter to you?
A: Because it benefits such a wide cross-section of our community. We’re proud that we help the Library offer resources that meet many different needs and benefit so many people. Supporting it is a way to help build a stronger, more connected city.
Q: How did you first learn about Donor-Advised Funds (DAF)?
A: Through our financial advisor while we were planning for retirement. Charitable giving had always been part of our lives, but the DAF has given us the tools to make our giving go further and take our philanthropy to a new level.
Q: For someone unfamiliar, what exactly is a Donor-Advised Fund?
A: Think of it as a charitable account. You contribute assets — often investments like stocks — and receive a tax receipt at the time you make the contribution.
Then you recommend grants to charities over time. The funds stay invested until they’re granted, they can potentially grow, which can mean even more support for the charities you care about.
Q: What do you see as the biggest advantages?
A: One big benefit is tax efficiency. Instead of selling stocks and paying capital gains tax, we transfer them directly to our DAF. We get a tax receipt for the full value and avoid the capital gains entirely. That means more money goes to charity instead of taxes.
It also simplifies things: one statement and one tax receipt.
Another advantage is flexibility. You can contribute to the fund when it makes financial sense for you, and then recommend grants to charities when they need support most.
Q: How has a DAF changed your relationship with the causes you care about?
A: It’s made us more engaged. Because the administrative side is taken care of, we spend more time learning about the organizations we support and understanding their impact. That’s led to deeper more meaningful relationships and a stronger connection to the work they’re doing.
Q: Would you recommend a Donor-Advised Fund to others?
A: Definitely. For us, a DAF has made giving both easier and more impactful. It’s a very organized and tax-efficient way to maximize the support we can provide to the causes we care about. But just as important, it’s been genuinely interesting and rewarding to stay connected with the charities we support and see the difference we’re making over time.