Creating a Legacy of Giving with Donor-Advised Funds Via a Statement of Charitable Intent
At Stablish Foundation, we’re passionate about helping families build a lasting legacy of charitable giving through Donor-Advised Funds (DAFs). A DAF allows donors to give back during their lifetime and continue supporting causes they care about even after their death. For families, this can also be a powerful tool to pass on charitable values to the next generation.
Families can establish a DAF while living, which continues to operate after their passing, or they can include it in their estate planning to take effect after death. Many parents also create a DAF that allows their children to fulfill their own charitable objectives, ensuring that philanthropy remains a core value for generations.
The Heart of a DAF: A Flexible Statement of Charitable Intent
While creating a DAF is the first step in establishing a philanthropic legacy, the key lies in developing a Statement of Charitable Intent. This document guides the trustee on how you, the donor, would like the funds to be used for charitable purposes. Unlike fixed plans, a Statement of Charitable Intent can be amended as often as needed to adapt to changing family goals or charitable interests.
Typically, DAFs contribute a minimum of 5% of their previous year-end value to charitable purposes. It’s essential for donors to carefully consider their long-term giving goals and clearly communicate them in the Statement of Charitable Intent. Stablish Foundation encourages families to revisit and revise their statements at least every five years to ensure their charitable desires are still reflected accurately.
Key Considerations for Your Statement of Charitable Intent
When creating a Statement of Charitable Intent, it’s important to ask yourself the following questions:
- How many charities will receive an annual distribution?
Will your legacy support one charity or several? Consider the size of your DAF and the impact of each donation—will it meet your charitable goals for each organization? - Do you have specific purposes for your gifts?
Some donors prefer their contributions to be used for specific causes, such as scholarships or medical research. If so, being clear in your Statement of Charitable Intent is crucial to ensure your wishes are carried out. - Should family members be involved?
Will your children or other family members help select charities or advise on the use of the DAF after your passing? Including them can create a shared family legacy of giving.
Once your Statement of Charitable Intent is in place, Stablish Foundation will vet the selected organizations to ensure they meet IRS requirements for charitable status, safeguarding the integrity of the DAF.
Examples of Legacy Gifts
Here are a few examples of how Stablish Foundation donors have used their Statements of Charitable Intent:
- Establish an annual scholarship at a specific university for high school students with a C average, excluding A and B students.
- Support research at an institution focused on the causes of cerebral palsy.
- Provide annual funding to a small church, specifically for capital improvements, not operational costs.
- Distribute annual gifts to five different charities for general operations.
As these examples show, the Statement of Charitable Intent can be as unique and specific as your philanthropic vision. It’s a dynamic document that allows you to define your legacy while maintaining the flexibility to adjust as needed.
Partner with Stablish Foundation
Creating a lasting charitable legacy takes careful planning, and Stablish Foundation is here to help guide you through the process. Whether you’re just beginning to think about how to use a DAF or are ready to refine your Statement of Charitable Intent, we’re here to provide expert support every step of the way.
For donors and financial advisors alike, establishing a DAF is not just about giving—it’s about creating a legacy that endures. Let us help you make it happen!