Donor Advised Funds

Donor-Advised Funds (DAF) are a convenient way to simplify your charitable giving. Simply recommend San Francisco Center for the Book as the recipient of a DAF grant, and we will be notified of your generous donation after the DAF institution sends us your contribution.

Donor-advised funds allow donors to make a charitable contribution, receive an immediate tax deduction and then recommend grants from the fund over time.  A donor-advised fund is basically a philanthropic version of an investment account, the purpose of which is to financially support nonprofit organizations that align with your passion. Cash, securities, and assets can each be donated to a nonprofit and the tax benefit realized with each deduction for the tax year in which they were given. These contributions are held where they earn tax-free interest, and are able to be deducted from taxes immediately, even though the amount may not be granted to a charity during the same tax period as the contribution was made. Ask your financial advisor whether a donor-advised fund could be right for you.

  • This step-by-step process is the easiest way to describe how DAFs work.

    1. You identify the donor-advised fund you would like to use.

    2. You select your fund advisor(s), potential successors, and public charity beneficiaries.

    3. You make contributions to the donor-advised fund in the form of cash, securities, real estate, or other assets of value.

    4. Your fund contributions become eligible for investment where they can grow tax-free.

    5. You claim the entire tax benefit/deduction in the immediate year of your contribution.

    6. You make grant-giving recommendations from the DAF account to IRS-approved charities.

    It is important to note that all fund contributions are irrevocable. Once placed in the fund and claimed for tax purposes, they must be granted at some point to a nonprofit organization.

  • Consider designating SFCB as a successor-in interest to a percentage of your charitable giving account to support book arts after your lifetime. Naming SFCB as a successor-in-interest is similar to making a beneficiary designation on a retirement account.

    For more information about how to name SFCB on your donor-advised fund, contact the public charity that holds your account.

  • You Can Contribute a Variety of Assets

    Donating cash to your favorite nonprofit is easy, but transferring stock or even more complex assets is not. With a DAF, however, transferring more complicated assets over to the fund is more seamless.

    Contributions can include personal assets such as cash, securities (stocks, bonds, and mutual funds), proceeds from life insurance, IRAs, 401Ks, private business interests, personal property, cryptocurrency, and even private company stock, all of which are eligible for an immediate tax deduction.

    Realize Immediate Tax Benefits

    You can claim the tax benefits in the immediate year of your fund contribution even though the funds may pass through to the receiving nonprofit in a subsequent year.

    Benefit from Tax-Free Growth

    The process is similar to how many people structure their 401(K) retirement accounts. Sponsoring organizations generally have a variety of investment options, which allows you to determine your risk comfort level and develop a strategy. If you are an investment-savvy donor, you may determine your own investment strategy for your account. Many sponsoring organizations also allow you to designate a financial advisor to manage the investment of your charitable funds. The idea is to grow your contributions tax-free so that you can have more to donate.

    Focus on Legacy Planning

    What kinds of legacy do you want to leave? With a DAF, you can move your focus from donating to a charity to envisioning your legacy. Donor-advised funds can be bequeathed to beneficiaries designated in your will. You can also name a fund sponsor/advisor in your estate planning to make decisions and donations in your name upon your passing as well as making them the recipient of additional assets of value that weren't previously part of the fund. In doing so, you can positively impact multiple charitable organizations without having to name each of them in the will.

    The sponsoring organization may itself allow you to transfer the contributions of the fund to successors or nonprofits as a death benefit. They may even allow you to redistribute the fund or section it off into multiple different funds that can be moved to more than one beneficiary or IRS-eligible organizations.