Donor Advised Funds

A Donor-Advised Fund (DAF) is a charitable giving vehicle that allows individuals, families, or organizations to make tax-deductible contributions to a fund that is managed by a sponsoring organization, typically a public charity or a financial institution. These contributions are then invested and can be recommended by the donor to make grants to qualified charitable organizations over time. DAFs offer several benefits, including tax advantages, ease of giving, and the ability to plan and manage charitable giving strategically.

Below is an outline of how the process of recommending a grant from a Donor-Advised Fund typically works:
 
  1. Open a Donor-Advised Fund Account: To get started, you need to open a DAF account with a sponsoring organization. Many financial institutions, community foundations, and charitable organizations offer DAF services. You can choose one that aligns with your charitable goals and preferences.

  2. Make Contributions: Once your DAF account is set up, you can contribute assets to it. These contributions can be in the form of cash, stocks, real estate, or other appreciated assets. When you make contributions to the DAF, you receive an immediate tax deduction for the full amount, even if you don't distribute the funds to charitable organizations right away.

  3. Invest and Grow Your Fund: The funds in your DAF are typically invested, allowing them to potentially grow over time. Most sponsoring organizations offer a range of investment options, and you can choose an investment strategy that aligns with your financial goals and risk tolerance.

    Recommend a Grant: When you're ready to make a charitable contribution to Carlthorp School, you can recommend a grant from your DAF. This is typically done through an online portal or by contacting your DAF provider. You'll need to provide the following information:

      • The name and contact information of Carlthorp School.
      • The amount of the grant you want to recommend.
      • Any specific purpose you want to place on the grant (if applicable).
         
    Review and Approval: The sponsoring organization that manages your DAF will review your grant recommendation to ensure that it complies with IRS regulations and the organization's policies. As long as the recommended recipient is a qualified charitable organization, and the grant follows the rules, it will likely be approved.

  8. Distribution of Funds: Once the grant is approved, the sponsoring organization will distribute the funds to Carlthorp School on your behalf. The process can take some time, so it's best to plan your grants in advance.

  12. Record Keeping: Keep records of your grant recommendations for your own tax records. Carlthorp School will provide you with documentation for your tax deductions.

  16. Repeat as Desired: You can continue to recommend grants from your DAF account over time. Some people choose to make recurring grants, while others make occasional contributions as needed.
DAFs are a powerful tool for philanthropic giving, allowing donors to streamline their charitable contributions, maximize tax benefits, and support causes they care about.
438 San Vicente Boulevard
Santa Monica, CA 90402
(310) 451-1332
Established in 1939, Carlthorp School is the oldest independent coeducational day school for grades K-6 located in Santa Monica, California.