Donor-Advised Funds: A Strategic Way to Give Back

Philanthropy has always played a crucial role in financial planning, allowing individuals to use their wealth to create meaningful change. However, navigating the world of charitable giving can be complex—balancing impact, tax efficiency, and long-term financial goals. That’s where donor-advised funds (DAFs) come in.

DAFs provide a flexible, tax-efficient, and streamlined approach to philanthropy. This makes it easier for donors to contribute to causes they care about while optimizing their financial plans. In this episode of The Connected Advisor podcast, Daniel Crosby, Chief Behavioral Officer at Orion Advisor Solutions, breaks down the benefits of DAFs, how they work, and why they are a game-changer for both donors and financial advisors.

What Are Donor-Advised Funds (DAFs)?

A donor-advised fund puts you in control of your charitable giving. You contribute assets, claim immediate tax deductions, and decide when and where to direct grants to charities—all on your terms. Unlike traditional donations that go straight to an organization, a DAF gives you flexibility and strategic power over your philanthropy.

Here’s why donors choose DAFs:
Get instant tax benefits while staying in control of how and when funds are distributed.
Grow your impact—invest contributions tax-free and give more over time.
Donate when it matters most instead of rushing year-end contributions.
Simplify your giving by managing all donations in one easy-to-track account.

With a donor-advised fund, you’re not just giving—you’re maximizing your impact and making philanthropy work for you.

Why Financial Advisors Should Care About DAFs

Financial advisors have a unique opportunity to help clients incorporate charitable giving into their broader financial plans. By understanding how donor-advised funds work, advisors can offer value-driven strategies that align philanthropy with long-term wealth management goals.

How Donor-Advised Funds Fit Into Financial Planning

Advisors can help clients strategically leverage DAFs to:

• Maximize tax efficiency by donating appreciated assets, avoiding capital gains taxes, and claiming deductions
• Align charitable giving with estate planning, ensuring long-term philanthropic impact
• Create a legacy of giving, allowing families to engage in multi-generational philanthropy
• Integrate giving with investment strategies, enabling donors to grow their funds before distributing them to charities

The Future of Charitable Giving

As philanthropy continues to evolve, donor-advised funds are becoming one of the fastest-growing charitable giving vehicles. They offer a balance between strategic financial planning and social impact. Thus, they are an attractive option for high-net-worth individuals and families.

Advisors who understand DAFs can enhance their client relationships by offering personalized, purpose-driven financial strategies that extend beyond traditional investment advice.

These insights are inspired by the latest episode of The Connected Advisor podcast featuring Daniel Crosby, Chief Behavioral Officer at Orion Advisor Solutions. Dive deeper into the power of conscious spending. Listen to the full episode here and explore more articles in this series.