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Learning, Sharing, and Teaching => Taxes => Topic started by: boarder42 on November 03, 2017, 04:05:49 AM

Title: Let's talk about DAFs
Post by: boarder42 on November 03, 2017, 04:05:49 AM
Spin off from the tax discussion. If charitable contributions end up above the line many here both pre and post fire will now have to change their donation plans. Maybe quickly. So let's dig in to DAFs.

http://jlcollinsnh.com/2012/02/08/how-to-give-like-a-billionaire/

Some comments have been made about Fidelity having much lower limits and similar fees to vanguard. Please transfer your info here from the tax change thread if you would.

Title: Re: Let's talk about DAFs
Post by: Need2Save on November 03, 2017, 06:50:10 AM
We recently posted about opening a Donor-Advised Fund https://need2save.com/2017/10/funding-maintaining-a-donor-advised-fund/ (https://need2save.com/2017/10/funding-maintaining-a-donor-advised-fund/) with links to Jim Collin's post and a few others like Physician on Fire. 

With the possibility that many families would not have sufficient charitable giving to continue to itemize their federal taxes in the near future, we feel even better about doing this now while we still received a benefit for the deduction in 2017.  We will continue to add to our fund, though while we are still working, and then let it fund charitable giving during our early and traditional retirement years. I really like the idea of letting the fund have it's own SWR as we distribute this in the future with tax-free growth.

We opened our DAF with Fidelity and it was relatively easy with a minimum contribution of $5,000.  Vanguard's minimum is $25,000 which was a little higher than we wanted to fund this year. 
Title: Re: Let's talk about DAFs
Post by: Daisy on November 03, 2017, 09:36:10 AM
Thanks for starting this thread! I was already thinking about starting a DAF this year to take advantage of my last year of high income even before this tax bill was proposed, but I was busy with other FIRE prep stuff. It sounds like I need to prioritize this ASAP and get it done this year.

Here is a snippet of my thoughts and others' replies from the tax thread:

d) If this passes by mid December, I would expect major charities (especially DAFs) to be flooded with donations.  I wouldn't wait until December to open that DAF, as the custodians are swamped at year end even during "normal" years.  I wish they had changed it so that QCD's could be used to fund DAFs.

My wife and I have already discussed moving all of our planned lifetime charitable donations into the next eight weeks(!), in order to get the tax benefit of making deductible contributions to a DAF.  Next year and every year after, there would be no tax incentive for charitable giving, or at the very least a lot less benefit because your first $24k of giving each year would not be tax deductible.

I may go this route too. I don't know quite enough about Donor Advised Funds. The little I read, it made it seem like Vanguard would choose the charities the money goes to? This can't be right. I only skimmed over it during my last working days a month ago and now that I am FIREd I should look at this before the end of the year.

It would be a good time for me to do it this year as well, as I have more taxable income this year due to working most of the year, rather than the next few years while FIREd. I could get a big tax break on this for this year.

Can someone give a quick tutorial on DAFs? I thought it would work that I would put money in a DAF and then I could choose which charities the money would go to.

You choose the charities and what funds to put the money into. I opened a Vanguard account last year (my last year of W2 income). Take the deduction in the year that you give the money, donate as you go, $500 minimum donation. $25K donation to start and then $5K increments later. It has worked very well.

Here is JLCollins from a few years ago...http://jlcollinsnh.com/2012/02/08/how-to-give-like-a-billionaire/

Thanks!

I just saw this on Vanguard's site. For cash donations to the DAF, you can deduct up to 50% of AGI. It's 30% for appreciated shares. I'm not sure what the max deductability is if you do a combo of cash and shares. Are the 50% and 30% mutually exclusive? If so, I could put more into the DAF and have this fund my charitable contributions, possibly for the rest of my life. And I would get a nice tax break this year.

https://www.vanguardcharitable.org/resource_center/taxes

Also, the jhcollins article comments state that the minimum grant you can give to a charity for the Vanguard DAF is $500, whereas for Fidelity Charitable it is $50. I can't find these details on their respective sites. Can anyone confirm?
Title: Re: Let's talk about DAFs
Post by: Daisy on November 03, 2017, 09:37:39 AM
And FIREchiefsr's excellent response:

d) If this passes by mid December, I would expect major charities (especially DAFs) to be flooded with donations.  I wouldn't wait until December to open that DAF, as the custodians are swamped at year end even during "normal" years.  I wish they had changed it so that QCD's could be used to fund DAFs.

My wife and I have already discussed moving all of our planned lifetime charitable donations into the next eight weeks(!), in order to get the tax benefit of making deductible contributions to a DAF.  Next year and every year after, there would be no tax incentive for charitable giving, or at the very least a lot less benefit because your first $24k of giving each year would not be tax deductible.

I may go this route too. I don't know quite enough about Donor Advised Funds. The little I read, it made it seem like Vanguard would choose the charities the money goes to? This can't be right. I only skimmed over it during my last working days a month ago and now that I am FIREd I should look at this before the end of the year.

It would be a good time for me to do it this year as well, as I have more taxable income this year due to working most of the year, rather than the next few years while FIREd. I could get a big tax break on this for this year.

Can someone give a quick tutorial on DAFs? I thought it would work that I would put money in a DAF and then I could choose which charities the money would go to.

Ultra quick.  Feel free to ask for more details:

a) you open a DAF with $5000 minimum at Fidelity (the $5000 is an irrevocable charitable gift to a legit 501c3 charity (i.e. your DAF).
b) you manage the investments (many low cost Fido index funds)
c) you and anybody you appoint recommends grants to whichever charity you wish to benefit
d) Fidelity Charitable confirms that it is a legit charity and sends them a check (you can choose to have the charity know who you are or not)
e) Fidelity charges you 0.6% average balance administrative fee (minimum $100) each year
f) you receive a tax deduction for when you donate the money to the DAF (i.e. before the end of 2017)
g) if Fido doesn't already have your charity on their "list," they require a few days to process (I have a monthly grant to my local, small, non-denominational church and it has worked without a hitch)

VG is also used by many, but IIRC the minimum is $25000.  Fees are roughly the same for typical balances.
Title: Re: Let's talk about DAFs
Post by: Daisy on November 03, 2017, 10:26:30 AM
I called Fidelity and they verified that their initial contribution limit is $5000 and their minimum grant size is $50. He said Vanguard also requires an additional contribution after the $25000 initial contribution. I don't remember seeing that on Vanguard's site.

Regardless, I think I am going with Fidelity due to the $50 grant minimum. $500 at Vanguard is too high for some of my charities.

He said the 50% AGI cash deduction limit and 30% AGI stock deduction limit are not mutually exclusive. If I understood him correctly, you are still capped at 50% AGI even if you contribute a combo of cash and stock.

I think I am going to go all in and contribute 50% of my AGI. This will reduce my AGI to the 15% tax bracket for the year, which means I can take advantage of zero capital gains taxes on any stock I sell this year. Double win!
Title: Re: Let's talk about DAFs
Post by: Daisy on November 03, 2017, 10:40:48 AM
I just opened the Fidelity account. It only took like 2 minutes. Nice!
Title: Re: Let's talk about DAFs
Post by: boarder42 on November 03, 2017, 10:47:22 AM
good to know its short and simple - how can you fund it.  I'd like to transfer some of my taxable at vanguard straight into there with out selling and creating a taxable event.  I would think this is possible.

I'm going to wait to set mine up until we're sure they arent going to pull charitable out and put it above the line.  Charities have got to be pulling out the stops with lobbyist on this right now and i think it will get rectified.
Title: Re: Let's talk about DAFs
Post by: Daisy on November 03, 2017, 11:20:59 AM
good to know its short and simple - how can you fund it.  I'd like to transfer some of my taxable at vanguard straight into there with out selling and creating a taxable event.  I would think this is possible.

I'm going to wait to set mine up until we're sure they arent going to pull charitable out and put it above the line.  Charities have got to be pulling out the stops with lobbyist on this right now and i think it will get rectified.

I'm just going to transfer cash from my bank since I will be in the 15% tax bracket anyways and will have zero cap gains taxes, but I do see an option to fund from a non-Fidelity brokerage account.

I'm going through with it regardless of whether this bill passes because I just FIREd and won't have a lot of income in the coming years. I was going to play the standard deduction game originally and double up on property taxes and charities every couple of years, but now with the increased standard deduction I don't think I would really exceed it. I have a feeling, if nothing else, the increased standard deduction will pass.

By creating the DAF this year I will probably save about $8k in income tax this year.
Title: Re: Let's talk about DAFs
Post by: boarder42 on November 03, 2017, 11:28:30 AM
good to know its short and simple - how can you fund it.  I'd like to transfer some of my taxable at vanguard straight into there with out selling and creating a taxable event.  I would think this is possible.

I'm going to wait to set mine up until we're sure they arent going to pull charitable out and put it above the line.  Charities have got to be pulling out the stops with lobbyist on this right now and i think it will get rectified.

I'm just going to transfer cash from my bank since I will be in the 15% tax bracket anyways and will have zero cap gains taxes, but I do see an option to fund from a non-Fidelity brokerage account.

I'm going through with it regardless of whether this bill passes because I just FIREd and won't have a lot of income in the coming years. I was going to play the standard deduction game originally and double up on property taxes and charities every couple of years, but now with the increased standard deduction I don't think I would really exceed it. I have a feeling, if nothing else, the increased standard deduction will pass.

By creating the DAF this year I will probably save about $8k in income tax this year.

nice ... thanks for the info.  i'm in a bit of a different boat b/c we have 5 years left so if this falls apart or they move charitable above the line(like they should) then we wont need to do this.
Title: Re: Let's talk about DAFs
Post by: PathtoFIRE on November 03, 2017, 12:46:16 PM
While most of you will be concerned about the new tax proposal on the lower end, we are in a little different situation, and I'd like to both follow what you all have to say and start a small sideline discussion for those in the higher brackets and AMT.

We itemize now and will continue to do so under the new proposal. In addition, our marginal rate right now is a moving target (nominally 33%, but we are solidly in AMT territory, so 28%, but we are still in the exemption phase-out area, so 28%*1.25=35%, but then you need to add the additional Medicare tax and net investment tax, so maybe 37%???). Under the new proposal, we would be solidly in the 35% and AMT, additional Medicare, and net investment would all go away. So by my estimates, for us and those in a similar situation, there is a negligible difference for marginal rates and therefore no new urgency to make a decision.

Some other considerations are:
-does the new proposal alter AGI calculations with regards to the DAF limits? The amount we were considered moving to a DAF was right close to 30% of AGI, and it is all appreciated funds that I no longer add to, so changes may necessitate staggering over 2 years (or more for some of you)
-obviously location becomes far more critical, as moves both in state and out will alter the deduction landscape for us and others
Title: Re: Let's talk about DAFs
Post by: Undecided on November 03, 2017, 01:23:51 PM
We itemize now and will continue to do so under the new proposal. In addition, our marginal rate right now is a moving target (nominally 33%, but we are solidly in AMT territory, so 28%, but we are still in the exemption phase-out area, so 28%*1.25=35%, but then you need to add the additional Medicare tax and net investment tax, so maybe 37%???). Under the new proposal, we would be solidly in the 35% and AMT, additional Medicare, and net investment would all go away. So by my estimates, for us and those in a similar situation, there is a negligible difference for marginal rates and therefore no new urgency to make a decision.

I though that the NIIT would stay (the WaPo analysis agrees), and it's not obvious to me that the Medicare payroll surtax would be terminated (although I'm not claiming to be sure about that).

Title: Re: Let's talk about DAFs
Post by: madamwitty on November 03, 2017, 06:16:44 PM
We started a DAF last year and have used it to pay for synagogue membership dues and school annual donation drive. We went with Fidelity because it had a lower minimum funding requirement. Both funding the account and requesting grants has been pretty quick and painless.

We were going to contribute more this year anyway (appreciated mutual funds) since this will be a high income year for us, and our following years will be lower earning years as we downshift leading up to FIRE. Good to know about the limits with respect to AGI.

If it hasn't been linked already, here are the end-of-year deadlines for funding a Fidelity DAF. The deadline for mutual funds held at other firms is November 27 and it does sound like good advice to me to get it in ahead of time since there may indeed be a flood of requests.

https://www.fidelitycharitable.org/what-you-can-donate/charitable-year-end-tax-deadlines.shtml
Title: Re: Let's talk about DAFs
Post by: FIREchiefsr on November 03, 2017, 06:44:42 PM
We itemize now and will continue to do so under the new proposal. In addition, our marginal rate right now is a moving target (nominally 33%, but we are solidly in AMT territory, so 28%, but we are still in the exemption phase-out area, so 28%*1.25=35%, but then you need to add the additional Medicare tax and net investment tax, so maybe 37%???). Under the new proposal, we would be solidly in the 35% and AMT, additional Medicare, and net investment would all go away. So by my estimates, for us and those in a similar situation, there is a negligible difference for marginal rates and therefore no new urgency to make a decision.

I though that the NIIT would stay (the WaPo analysis agrees), and it's not obvious to me that the Medicare payroll surtax would be terminated (although I'm not claiming to be sure about that).

I haven't found anything in the actual draft bill suggesting any changes to the NIIT and Medicare surtax.  I think they remain as is.
Title: Re: Let's talk about DAFs
Post by: seattlecyclone on November 04, 2017, 09:55:45 AM
As I see it, the DAF has two main benefits.

The first is that it's an easy way to take a write-off for appreciated stocks without having to call up each charity and find out whether they accept stock and where to send it. You can just send the stock to one place that you know will take it, and they'll send cash to charities for you.

The second benefit is the ability to decouple the time of your tax write-off from the time of donation. In theory this sounds great to me, but the annual fees that the DAF providers charge really have turned me off so far. Fidelity and Schwab and Vanguard all skim 0.6% off the top each year, and the only added value they provide is mailing checks to charities from time to time. For me, this fee would act as an incentive to distribute the money as quickly as possible so that the charities get it instead of the DAF company. I'd feel much better about it if they charged a buck or two for each donation to cover their expenses, rather than a percentage of assets whether I make no donations that year or 100.

So for me personally, if I had a bunch of appreciated stock I wanted to donate, I'd go ahead and open a DAF account and empty it out within a year or two. I don't, so I've so far avoided opening a DAF.
Title: Re: Let's talk about DAFs
Post by: boarder42 on November 04, 2017, 11:42:06 AM
As I see it, the DAF has two main benefits.

The first is that it's an easy way to take a write-off for appreciated stocks without having to call up each charity and find out whether they accept stock and where to send it. You can just send the stock to one place that you know will take it, and they'll send cash to charities for you.

The second benefit is the ability to decouple the time of your tax write-off from the time of donation. In theory this sounds great to me, but the annual fees that the DAF providers charge really have turned me off so far. Fidelity and Schwab and Vanguard all skim 0.6% off the top each year, and the only added value they provide is mailing checks to charities from time to time. For me, this fee would act as an incentive to distribute the money as quickly as possible so that the charities get it instead of the DAF company. I'd feel much better about it if they charged a buck or two for each donation to cover their expenses, rather than a percentage of assets whether I make no donations that year or 100.

So for me personally, if I had a bunch of appreciated stock I wanted to donate, I'd go ahead and open a DAF account and empty it out within a year or two. I don't, so I've so far avoided opening a DAF.

Under current tax code yes. Under the proposed tax code many will no longer itemize. And therefore donations to charity will not see a tax brake. So there is a very real savings overall if I can dump 25-50k in now and save 25% on it all vs what I'll be able to do next year if they don't move charitable donations above the line
Title: Re: Let's talk about DAFs
Post by: seattlecyclone on November 04, 2017, 03:26:00 PM
I agree that you'll be better off tax-wise if you donate money in a year when you can deduct it, compared to a year where you can't.

But for me personally, the annual fee would discourage me from stretching the eventual donations out over time. Why let Vanguard or Fidelity or Schwab take 0.6% of the money each year instead of distributing it all to charity right away?
Title: Re: Let's talk about DAFs
Post by: sol on November 04, 2017, 03:47:19 PM
I agree that you'll be better off tax-wise if you donate money in a year when you can deduct it, compared to a year where you can't.

But for me personally, the annual fee would discourage me from stretching the eventual donations out over time. Why let Vanguard or Fidelity or Schwab take 0.6% of the money each year instead of distributing it all to charity right away?

I understand your concerns, but keep in mind that we're talking about losing 0.6% per year vs saving 25% (or more) in taxes this year.  This suggests you should break even holding the DAF for up to 41 years, and it's even better than that because the up front savings stays invested and earning interest each year.

Even if you're only putting in the minimum $25k (for Vanguard) this year, in the 28% bracket that's $7000 in extra money you get to donate to charity.  You're effectively donating $25k to charity while only paying ~$18k out of pocket.  I'm willing to to pay $150 per year in fees to give away a free $7000 that otherwise would have been lost to taxes.
Title: Re: Let's talk about DAFs
Post by: seattlecyclone on November 04, 2017, 05:36:14 PM
Your post and the underlying math really only speaks to the advantage of taking a tax break on a donation as opposed to not getting one. I fully agree that the tax break gives you an extra $7,000 to donate, compared to if you couldn't deduct your donation. I'm totally on board with the idea that the lump sum donation can be a good idea if tax code changes mean you won't be able to deduct donations going forward.

That doesn't address my underlying concern though. Once you've put the money in the DAF, you have a choice between distributing it to a charity right away, or leaving it in there and having your DAF administrator skim 0.6% off the top for each year you wait. I'd be inclined to give it all away immediately. Why not?
Title: Re: Let's talk about DAFs
Post by: Paul der Krake on November 04, 2017, 07:14:25 PM
What's the legal magic sauce that makes DAFs possible?

Would it be possible to create one's own DAF/foundation, potentially paying an attorney to deal with the administrative boilerplate?
Title: Re: Let's talk about DAFs
Post by: FIREchiefsr on November 04, 2017, 07:40:33 PM
What's the legal magic sauce that makes DAFs possible?

Would it be possible to create one's own DAF/foundation, potentially paying an attorney to deal with the administrative boilerplate?

There's no magic.  A DAF has to be set up as a 501c3 charity, and then any donations are tax deductible in the year received.  As long as the grants are to other 501c3 charities, then it's all pretty straightforward.  We've been saying "Fidelity," but we're really talking about "Fidelity Charitable" which is in many respects an independent entity.

Those whose giving is very large do use attorneys to establish foundations, but it doesn't take much in legal fees to offset that 0.6% annual fee from Fidelity Charitable.  If you have $100K in your DAF, that's $600 per year.
Title: Re: Let's talk about DAFs
Post by: sol on November 04, 2017, 07:48:27 PM
What's the legal magic sauce that makes DAFs possible?

Would it be possible to create one's own DAF/foundation, potentially paying an attorney to deal with the administrative boilerplate?

It is possible, but much more expensive.  Generally not recommended for amounts less than $250k.  Setting up a private foundation has certain advantages, though.  In the US they're usually set up as 509s, and are necessarily a 501(c)(3) exempt organizations.  They're subject to 2% excise taxes, about 1% per year expenses to administer, and are required to disperse about 5% per year but you can "disperse" it on just about anything, including paying your family members to work there (a strategy employed by the Trumps, Clintons, Gates, and Buffets among others).

From one of my old posts:
Quote
One easy option, that Nords has recommended (http://), is to use a Donor-Advised-Fund.  This is essentially like a 401k plan that is designated for charity instead of for retirement.  You can set one up with Vanguard or Fidelity, and you retain control over the asset allocation.  Contributions are tax deductible in the year they are made (up to 50% of your AGI for cash, 30% of AGI for appreciated stock) so they are a tax-efficient way to donate to charity in your final year(s) of high income.  Your donations can then grow tax free in the fund, and you can designate distributions to 501(c)(3) organizations of your choice for the rest of your life.  This has the benefit of getting the full tax deduction when it still has value to you, while you are working.  People who don't have tax liability in retirement or don't itemize would otherwise receive no tax benefits from charitable giving, so the DAF fixes that.  If you're like me, and intend to continue your charitable donations past your working career, this plan allows you to donate more by losing less to taxes.  You effectively reclaim federal tax money (some of which is spent on social welfare programs and some not) and can then redirect it to social welfare programs of your choice.

A more difficult option is to set up a private foundation.  Foundations are non-profit organizations, unlike a DAF that is a personal account within a non-profit organization, but they otherwise have many of the same features as a DAF like up-front tax deductibility of donations (up to 30% of your AGI for cash, 20% of AGI for appreciated stock).  They also come with some additional restrictions (you must distribute at least 5% per year to charitable causes, unlike a DAF that can distribute zero) and also some additional benefits (you retain more control over where the money goes, including the ability to legally pay your family to manage the foundation or perform charitable activities).  Plus you get to name it something cool like "Sol's Giant Pile of Smugness" and then talk about your "endowment" at dinner parties.

You can do both!  If you establish a private foundation, you can then meet your 5% annual disbursement requirement by donating your donation to a DAF.  In this case, the foundation is just an intermediate holding tank.  (You only get the tax deduction once, of course.)

In either case, donating appreciated assets (stocks or real estate) totally avoids capital gains taxes.  If you're planning to donate $10,000 to charity, you can do a heck of a lot more good by donating $10,000 of old VTSMX shares from 2009 than you can by liquidating those shares and then donating the residual value out of your checking account.
Title: Re: Let's talk about DAFs
Post by: Dada Almond on November 04, 2017, 09:13:13 PM
I was already planning to open a DAF this year.  For me it makes extra sense since I am pretty likely to have the highest tax year of my working career this year.  I was already sold on the big savings on my contributions, but being able to easily skip capital gains on appreciated stock and putting multiple years worth of contributions in at once to offset a high tax year really sweeten the deal. 

Now knowing that it may be the last year it makes sense due to (admittedly uncertain) legislation I see a pretty good extra incentive to do so. 

Responding to seattlecyclone - I think it's probably a psychological benefit.  If you set a large chunk aside now and give it away over time in the annual increments you are comfortable with, you feel good about giving to charity for several/many years. 
Title: Re: Let's talk about DAFs
Post by: sol on November 04, 2017, 09:18:15 PM
I think it's probably a psychological benefit.  If you set a large chunk aside now and give it away over time in the annual increments you are comfortable with, you feel good about giving to charity for several/many years.

The DAF literature suggests that you have this exactly backwards.  Private foundations are required to disperse at least 5% per year, but DAFs are not.  This has resulted in thousands of little DAFs around the country that disperse zero, year after year.  Charities hate this, because it has effectively slowed the flow of funds from donors to charitable causes.  They would much prefer you donated to an existing foundation, or to the charities in year one, rather than stashing it in a DAF and then potentially ignoring for years and years.
Title: Re: Let's talk about DAFs
Post by: Dada Almond on November 04, 2017, 09:36:24 PM
I think it's probably a psychological benefit.  If you set a large chunk aside now and give it away over time in the annual increments you are comfortable with, you feel good about giving to charity for several/many years.

The DAF literature suggests that you have this exactly backwards.  Private foundations are required to disperse at least 5% per year, but DAFs are not.  This has resulted in thousands of little DAFs around the country that disperse zero, year after year.  Charities hate this, because it has effectively slowed the flow of funds from donors to charitable causes.  They would much prefer you donated to an existing foundation, or to the charities in year one, rather than stashing it in a DAF and then potentially ignoring for years and years.

Maybe I should have said "perceived psychological benefit"?  People think that's what they'll do and instead never give the money away. 

Or maybe from a more cynical perspective, people don't care about charities and just want to do whatever they can to reduce the current year's taxes even if no one benefits from the money?
Title: Re: Let's talk about DAFs
Post by: FIREchiefsr on November 04, 2017, 09:41:14 PM
I think it's probably a psychological benefit.  If you set a large chunk aside now and give it away over time in the annual increments you are comfortable with, you feel good about giving to charity for several/many years.

The DAF literature suggests that you have this exactly backwards.  Private foundations are required to disperse at least 5% per year, but DAFs are not.  This has resulted in thousands of little DAFs around the country that disperse zero, year after year.  Charities hate this, because it has effectively slowed the flow of funds from donors to charitable causes.  They would much prefer you donated to an existing foundation, or to the charities in year one, rather than stashing it in a DAF and then potentially ignoring for years and years.

Maybe I should have said "perceived psychological benefit"?  People think that's what they'll do and instead never give the money away. 

Or maybe from a more cynical perspective, people don't care about charities and just want to do whatever they can to reduce the current year's taxes even if no one benefits from the money?

This doesn't make sense.  People "give the money away" at the exact moment that it is donated to their (or anyone else's) DAF.  It is then no longer their money but is "owned" by a charity (the DAF).  It absolutely will eventually go to a "regular" 501c3 charity.  If the person who created the DAF passes away, after so many years of inactivity the funds will be dispersed.  Why would somebody who cares only about money give away $1000 to save $350 in taxes?
Title: Re: Let's talk about DAFs
Post by: CoffeeR on November 04, 2017, 09:55:10 PM
Spin off from the tax discussion. If charitable contributions end up above the line many here both pre and post fire will now have to change their donation plans. Maybe quickly. So let's dig in to DAFs.
I opened a DAF with Charles Schwab last year. I've been pleased. It was easy to do and donations go without a hitch (as mentioned it takes a little while if the charity is new to the sponsor of the DAF).

I contributed appreciate stock (ETF's) so this way I avoided capital gains. Many larger charities can take stock contributions, but with a DAF you have much for flexibility. In the case of Charles Schwab (the only one I have direct experience with), customer service has been excellent.

I highly recommend DAF to anyone where it makes sense.

There are many DAF sponsors, but the three big ones are Fidelity, Schwab, Vanguard. Personally I would recommend Fidelity or Schwab unless you already have accounts with Vanguard.
Title: Re: Let's talk about DAFs
Post by: FireLane on November 05, 2017, 02:55:21 PM
I just opened my DAF this month.

I went with Fidelity because of their lower minimums, but my taxable holdings were with Vanguard, which made the process more complicated. Both Vanguard and Fidelity initially gave me incorrect advice about how to make the transfer before I finally found the right form to fill out. Once I faxed it in, it went through quickly and smoothly.

It makes sense to do this now, while I'm still working, so I get the tax deduction while my marginal rate is highest. Plus, if you specify that you want to donate your most appreciated lots of stock, it raises the overall basis of your taxable account and saves you paying capital-gains taxes after retirement.

Like others here, after I retire, I'm going to treat my Fidelity Charitable account as its own pot of money with its own SWR and make all my charitable donations from there. I might do 4% or even 5% per year, because if it runs out, who cares?
Title: Re: Let's talk about DAFs
Post by: MDM on November 05, 2017, 03:24:35 PM
Donor advised fund - Bogleheads (https://www.bogleheads.org/wiki/Donor_advised_fund) has what appears to be a good comparison table for some of the major brokerages.
Title: Re: Let's talk about DAFs
Post by: FireLane on November 05, 2017, 06:23:33 PM
FireLane, which form did you end up needing? I want to use specific identification to yo donate the most appreciated shares (while later being able to sell the least appreciated ones).

Yes, that's what I did too. This is the form you need:

https://www.fidelitycharitable.org/docs/Contribution.pdf
Title: Re: Let's talk about DAFs
Post by: madamwitty on November 06, 2017, 12:17:09 PM
FireLane, which form did you end up needing? I want to use specific identification to yo donate the most appreciated shares (while later being able to sell the least appreciated ones).

Yes, that's what I did too. This is the form you need:

https://www.fidelitycharitable.org/docs/Contribution.pdf

Thanks for the link! I'll be doing this too.
Title: Re: Let's talk about DAFs
Post by: Yankuba on November 06, 2017, 12:39:56 PM
PTF
Title: Re: Let's talk about DAFs
Post by: FIREchiefsr on November 06, 2017, 02:46:22 PM
PTF

Pardon the newbie here.  What does "PTF" mean and how does it relate to the recent posts in this thread?  Thanks.
Title: Re: Let's talk about DAFs
Post by: MDM on November 06, 2017, 04:58:23 PM
PTF

Pardon the newbie here.  What does "PTF" mean and how does it relate to the recent posts in this thread?  Thanks.
Posting To Follow.

Making a post in a thread will cause the thread to appear in "Show new replies to your posts." whenever there are such new replies.  That can be helpful or irritating.....

See also * Acronyms and Slang Frequently Used on the Forum * - Early Retirement & Financial Independence Community (http://www.early-retirement.org/forums/f47/acronyms-and-slang-frequently-used-on-the-forum-34884.html) and Abbreviations and Acronyms - Bogleheads (https://www.bogleheads.org/wiki/Abbreviations_and_Acronyms) for others.
Title: Re: Let's talk about DAFs
Post by: FIREchiefsr on November 06, 2017, 10:11:36 PM
PTF

Pardon the newbie here.  What does "PTF" mean and how does it relate to the recent posts in this thread?  Thanks.
Posting To Follow.

Making a post in a thread will cause the thread to appear in "Show new replies to your posts." whenever there are such new replies.  That can be helpful or irritating.....

See also * Acronyms and Slang Frequently Used on the Forum * - Early Retirement & Financial Independence Community (http://www.early-retirement.org/forums/f47/acronyms-and-slang-frequently-used-on-the-forum-34884.html) and Abbreviations and Acronyms - Bogleheads (https://www.bogleheads.org/wiki/Abbreviations_and_Acronyms) for others.

Thanks.  I googled it and came up with "permanent temporary fix," which could also fit the context of some of these threads. LOL
Title: Re: Let's talk about DAFs
Post by: boarder42 on November 07, 2017, 03:26:17 AM
Thanks for that table MDM
Title: Re: Let's talk about DAFs
Post by: CanuckExpat on November 11, 2017, 07:00:24 PM
We established a DAF with Vanguard Charitable in our second last working year. That was our highest income year, so most tax bang for the buck, it was also nice not worry about an extra bit of tax optimization in our last working year.

Since we hold our taxable account with Vanguard, it was very easy and quick to donate appreciated shares. Overall we've been very happy with Vanguard charitable. I don't mind their higher minimum funding requirement, as it is more "forced" giving. They have some rational here as to why their minimum grant is $500: Why $500? (https://www.vanguardcharitable.org/blog/why-500). In the end, $500 has never been too much to give to a charity. They also have an article entitled Planning for your ‘philanthropy retirement’ (https://www.vanguardcharitable.org/blog/planning-your-philanthropy-retirement)

I will agree with Seattle Cyclone that if you know exactly which charity you want to support in the future, your best bet might be to give them the lump sum donation. For us, donating to the the DAF was nice since it removed the analysis paralysis which might have postponed the large donation decision.
Title: Re: Let's talk about DAFs
Post by: topshot on November 14, 2017, 07:02:15 AM
Posting To Follow.

Making a post in a thread will cause the thread to appear in "Show new replies to your posts." whenever there are such new replies.  That can be helpful or irritating.....
Using the Notify button at the top (to the right of the Reply button) should accomplish at least a similar thing (email whenever the next reply is made).

On topic, I guess I've been oblivious to at least this portion of the tax proposals. I hadn't heard they were considering only allowing charitable giving over $24K to be deducted.
Title: Re: Let's talk about DAFs
Post by: Dada Almond on November 16, 2017, 10:58:31 AM
Just opened a DAF at Schwab.  It was just as quick and easy to open and fund the account as everyone said it should be.
Title: Re: Let's talk about DAFs
Post by: Fomerly known as something on November 16, 2017, 06:24:03 PM
I just finished a phone call with my accountant.  He recommended looking into changing my charitable deductions to every other year so as to make sure they count at least half the time.  (I'm single so only have to get above a standard $12,000).  I was already thinking of opening a DAF so will likely do so next year.  I'll use the DAF mainly to be able to "smooth" out my giving to several small local charities that need yearly funding.
Title: Re: Let's talk about DAFs
Post by: Daisy on November 16, 2017, 10:40:39 PM
I just finished a phone call with my accountant.  He recommended looking into changing my charitable deductions to every other year so as to make sure they count at least half the time.  (I'm single so only have to get above a standard $12,000).  I was already thinking of opening a DAF so will likely do so next year.  I'll use the DAF mainly to be able to "smooth" out my giving to several small local charities that need yearly funding.

He must have read my Standard Deductions Games thread. With the increased standard deduction, I don't think doubling up on charitable contributions and property taxes every other year will be very profitable for me, if at all. So I am maxing out my DAF with 50% AGI this year which should cover at least 10 years of charitable deductions, and save me about $8k in federal income taxes this year.

Note that I just FIREd so this is probably my last high income year, so it makes sense for me to do this.
Title: Re: Let's talk about DAFs
Post by: chasesfish on November 17, 2017, 06:12:39 AM
I'm a huge fan of the DAF...it took me a while to stomach the initial 5k contribution.  I'm still cheap
Title: Re: Let's talk about DAFs
Post by: honeyfill on November 17, 2017, 07:47:13 AM
We are pulling the trigger next month on a Vanguard DAF.  We already have all our accounts there and wanted to give at least 25k anyway so it all made sense.  If I had heard about these DAF's earlier in the year I would have strongly considered  a Fidelity account.  I don't want to risk a paperwork snafu spoiling my deduction in my last big income year.  (Plus I'm lazy)   I like that Fidelity  allow smaller ongoing donations. I believe Vanguard still requires a minimum 5k donation even after the initial 25k.  We are finagling our withdrawals for the first few years to qualify for ACA subsidies, so  with the DAF we can continue to contribute to charity without adding to income. 
Title: Re: Let's talk about DAFs
Post by: boarder42 on December 20, 2017, 11:52:52 AM
Just pulled the trigger on a 25k rollover from our taxable accounts to vangaurd charitable.  i wanted to do fidelity but we are too late for that since the money was in vanguard funds. 

I did talk to a fidelity rep and you can do DAF to DAF transfers - so i can get to the lower minimum contribution levels by just moving the money from one DAF to another. 

Its a bit of a sting to just drop 25k from what was retirement contributions but in the long run this will benefit us much more.
Title: Re: Let's talk about DAFs
Post by: tweezers on December 20, 2017, 11:57:52 AM
Just pulled the trigger on a 25k rollover from our taxable accounts to vangaurd charitable.  i wanted to do fidelity but we are too late for that since the money was in vanguard funds. 

I did talk to a fidelity rep and you can do DAF to DAF transfers - so i can get to the lower minimum contribution levels by just moving the money from one DAF to another. 

Its a bit of a sting to just drop 25k from what was retirement contributions but in the long run this will benefit us much more.

What is the turnaround time on funding a DAF with Fidelity, B42?  Is it too late to do so now?  I don't think we want to commit to $25K in a Vanguard account.
Title: Re: Let's talk about DAFs
Post by: boarder42 on December 20, 2017, 12:00:06 PM
Just pulled the trigger on a 25k rollover from our taxable accounts to vangaurd charitable.  i wanted to do fidelity but we are too late for that since the money was in vanguard funds. 

I did talk to a fidelity rep and you can do DAF to DAF transfers - so i can get to the lower minimum contribution levels by just moving the money from one DAF to another. 

Its a bit of a sting to just drop 25k from what was retirement contributions but in the long run this will benefit us much more.

What is the turnaround time on funding a DAF with Fidelity, B42?  Is it too late to do so now?  I don't think we want to commit to $25K in a Vanguard account.

they can be quick if you're funding with cash or with fidelity shares.  i wanted to fund with appreciated chares from vanguard to avoid future tax hits on those so i took my highest gaining shares and just moved those over.  it takes 4-6 weeks if you're moving it out of a non fidelity fund or account and dont want to have to sell the shares.
Title: Re: Let's talk about DAFs
Post by: madamwitty on December 21, 2017, 04:07:37 PM
Just pulled the trigger on a 25k rollover from our taxable accounts to vangaurd charitable.  i wanted to do fidelity but we are too late for that since the money was in vanguard funds. 

I did talk to a fidelity rep and you can do DAF to DAF transfers - so i can get to the lower minimum contribution levels by just moving the money from one DAF to another. 

Its a bit of a sting to just drop 25k from what was retirement contributions but in the long run this will benefit us much more.

Thanks for the tip about DAF to DAF transfers. We started a Fidelity DAF last year but opened one at Vanguard this year. Nice to know we could potentially consolidate.
Title: Re: Let's talk about DAFs
Post by: sol on December 21, 2017, 05:04:25 PM
I opened a DAF at vanguard last night, took about twenty minutes.

This morning I funded it, which took more like 30 minutes because I had to identify which specific lots I was donating, because I use the specID cost basis method.
Title: Re: Let's talk about DAFs
Post by: seattlecyclone on December 21, 2017, 05:10:58 PM
I opened a DAF at vanguard last night, took about twenty minutes.

This morning I funded it, which took more like 30 minutes because I had to identify which specific lots I was donating, because I use the specID cost basis method.


Did you have to talk to any humans to do any part of this?
Title: Re: Let's talk about DAFs
Post by: sol on December 21, 2017, 05:23:45 PM
I opened a DAF at vanguard last night, took about twenty minutes.

This morning I funded it, which took more like 30 minutes because I had to identify which specific lots I was donating, because I use the specID cost basis method.


Did you have to talk to any humans to do any part of this?

I did speak to a human, but did not have to.  But only because of the specID thing.  You can submit the written list of specific lots by email to vanguard charitable directly, or by phone if you call vanguard (not vanguard charitable) directly.

I thought it would be easier to call it in than to prepare a written list, but I called vanguard charitable instead of vanguard.  They told me to just submit the list by email.

If you're not using specID they'll just donate your oldest shares in the specified account, which is probably pretty close to optimal.  I actually sorted by purchase share price and donated the most appreciated shares I had in there, rather than just donating the oldest ones.  It was only a slightly different list, since the account hasn't been around long enough to see any serious declines.  The past eight years have been amazing!
Title: Re: Let's talk about DAFs
Post by: seattlecyclone on December 21, 2017, 05:30:48 PM
I opened a DAF at vanguard last night, took about twenty minutes.

This morning I funded it, which took more like 30 minutes because I had to identify which specific lots I was donating, because I use the specID cost basis method.


Did you have to talk to any humans to do any part of this?

I did speak to a human, but did not have to.  But only because of the specID thing.  You can submit the written list of specific lots by email to vanguard charitable directly, or by phone if you call vanguard (not vanguard charitable) directly.

I thought it would be easier to call it in than to prepare a written list, but I called vanguard charitable instead of vanguard.  They told me to just submit the list by email.

If you're not using specID they'll just donate your oldest shares in the specified account, which is probably pretty close to optimal.  I actually sorted by purchase share price and donated the most appreciated shares I had in there, rather than just donating the oldest ones.  It was only a slightly different list, since the account hasn't been around long enough to see any serious declines.  The past eight years have been amazing!

Thanks for the info. I should probably go ahead and do that. I figured I wouldn't save much compared to just donating via credit card because I reset the cost basis for most of my taxable account just last February when the market dipped for a bit, but it turns out my S&P 500 fund shares have gone up 40% since then. The market sure can perform well when you're not paying much attention!
Title: Re: Let's talk about DAFs
Post by: chasesfish on December 21, 2017, 06:07:59 PM
Just pulled the trigger on a 25k rollover from our taxable accounts to vangaurd charitable.  i wanted to do fidelity but we are too late for that since the money was in vanguard funds. 

I did talk to a fidelity rep and you can do DAF to DAF transfers - so i can get to the lower minimum contribution levels by just moving the money from one DAF to another. 

Its a bit of a sting to just drop 25k from what was retirement contributions but in the long run this will benefit us much more.

Thanks for the tip about DAF to DAF transfers. We started a Fidelity DAF last year but opened one at Vanguard this year. Nice to know we could potentially consolidate.

That part works really easy.  I also checked into that with our local community foundation and they allow to/from transfers of donor advised funds.  I volunteer with them, but can't stomach their cost and investment performance.
Title: Re: Let's talk about DAFs
Post by: gatortator on December 22, 2017, 10:25:22 AM
ptf
Title: Re: Let's talk about DAFs
Post by: boarder42 on December 22, 2017, 10:40:49 AM
ptf

Won't be much to follow in 9 days. Start making your moves asap to get tax deduction for this year.
Title: Re: Let's talk about DAFs
Post by: Dicey on December 26, 2017, 12:54:32 AM
P2F. I've opened a DAF with Fido, but haven't funded it. Still wrangling over the amount to contribute for 2017 with DH. Fido says my check can be postmarked Dec. 31st, so yeah, I'm still working on this.
Title: Re: Let's talk about DAFs
Post by: katsiki on December 26, 2017, 06:59:17 PM
Wow!  It took less than 2 minutes to open the DAF with Fidelity.  Amazing world...
Title: Re: Let's talk about DAFs
Post by: chasesfish on December 26, 2017, 07:09:40 PM
Wow!  It took less than 2 minutes to open the DAF with Fidelity.  Amazing world...

Congrats!  Welcome to the family!
Title: Re: Let's talk about DAFs
Post by: Daisy on December 26, 2017, 07:19:02 PM
Wow!  It took less than 2 minutes to open the DAF with Fidelity.  Amazing world...

Yep! That's exactly what I said on this same thread back on November 3rd!
Title: Re: Let's talk about DAFs
Post by: katsiki on December 26, 2017, 07:21:30 PM
Wow!  It took less than 2 minutes to open the DAF with Fidelity.  Amazing world...

Yep! That's exactly what I said on this same thread back on November 3rd!

Funny you mentioned this...  I was reading back through the thread again and saw your comments!
Title: Re: Let's talk about DAFs
Post by: Nathaniel on December 26, 2017, 07:38:41 PM
Opened my Vanguard DAF today. It was quick and painless.

Sent from my Nexus 6P using Tapatalk

Title: Re: Let's talk about DAFs
Post by: Daisy on December 26, 2017, 07:56:46 PM
Opened my Vanguard DAF today. It was quick and painless.

Sent from my Nexus 6P using Tapatalk

Did you beat our two-minute record?
Title: Re: Let's talk about DAFs
Post by: Nathaniel on December 26, 2017, 08:02:57 PM
Opened my Vanguard DAF today. It was quick and painless.

Sent from my Nexus 6P using Tapatalk

Did you beat our two-minute record?
Sadly, no. There was some hesitation on my part. I'm not used to parting with >$25k so easily.
Title: Re: Let's talk about DAFs
Post by: chasesfish on December 26, 2017, 08:05:01 PM
Opened my Vanguard DAF today. It was quick and painless.

Sent from my Nexus 6P using Tapatalk

Did you beat our two-minute record?
Sadly, no. There was some hesitation on my part. I'm not used to parting with >$25k so easily.

"Some"  Hahaha!   It took us months to part with the initial $5,000 for Fidelity.  My wife is tighter than I am which made it a struggle.  Happy we did it though
Title: Re: Let's talk about DAFs
Post by: Daisy on December 26, 2017, 08:22:04 PM
The struggle wasn't as real for me. I know eventually I will give this money away as charity. I am very excited to reduce my taxes by about $8,000 this year, which is my last fully employed year.
Title: Re: Let's talk about DAFs
Post by: boarder42 on December 27, 2017, 06:34:36 AM
The struggle wasn't as real for me. I know eventually I will give this money away as charity. I am very excited to reduce my taxes by about $8,000 this year, which is my last fully employed year.

Same here. Very simple decision.
Title: Re: Let's talk about DAFs
Post by: Dicey on December 27, 2017, 07:46:45 AM
Ha! I opened the account with Fidelity, but I haven't funded it yet, as DH is not fully on board. I want to sock 25k in it, which, after all of our YTD charitable giving, would max us out. He's worried about what it will do to our AGI. We're always on the prowl for our next rental property and it could kill our ability to qualify. He has a point, so we're still negotiating. Fortunately,  we have a four-hour road trip today.
Title: Re: Let's talk about DAFs
Post by: chasesfish on December 27, 2017, 11:15:04 AM
Banker here - Charitable deductions are reported on your schedule A and *after* your AGI.  It won't hurt you on qualifying for a rental
Title: Re: Let's talk about DAFs
Post by: seattlecyclone on December 27, 2017, 11:39:57 AM
Opened my Vanguard DAF today. It was quick and painless.

Sent from my Nexus 6P using Tapatalk

Did you beat our two-minute record?

Opening the account with Vanguard Charitable and transferring mutual funds into there probably took me more than two minutes, but not a whole lot more. It was really quite simple.
Title: Re: Let's talk about DAFs
Post by: honeyfill on December 27, 2017, 11:53:36 AM
Opened mine with Vanguard today,  the application took about 2 minutes but it took me 10 more to figure out which stocks had the highest gains so I would get the maximum tax advantage.  I opened mine for 30k just to have a little extra.  We usually give 5 -6k per year to charity so this should last us 6 years.  By then , I will have started SS and used up most of my income tricks , so i will need another tax write off!.
Title: Re: Let's talk about DAFs
Post by: Trudie on December 27, 2017, 12:55:06 PM
We just pre-paid our 2018 pledge commitments and will open a DAF in 2019 at the beginning of the year.

We have stuff with TIAA and so will go with them.  I'm lobbying them to reduce the minimum initial investment to broaden the appeal to people in a wider range of circumstances.  While the $5K initial investment doesn't make me cringe, it would make many of my peers cringe.  Many of them work in staff positions at colleges and universities -- the very people and institutions TIAA exists to support.
Title: Re: Let's talk about DAFs
Post by: boarder42 on December 27, 2017, 03:40:43 PM
We just pre-paid our 2018 pledge commitments and will open a DAF in 2019 at the beginning of the year.

We have stuff with TIAA and so will go with them.  I'm lobbying them to reduce the minimum initial investment to broaden the appeal to people in a wider range of circumstances.  While the $5K initial investment doesn't make me cringe, it would make many of my peers cringe.  Many of them work in staff positions at colleges and universities -- the very people and institutions TIAA exists to support.

why are you wiating til next year are you going to itemize next year - if not that defeats the purpose of this.
Title: Re: Let's talk about DAFs
Post by: Dicey on December 28, 2017, 08:52:07 AM
Banker here - Charitable deductions are reported on your schedule A and *after* your AGI.  It won't hurt you on qualifying for a rental
Oh boy! We found a possible rental yesterday that we're going to make a lowball offer on. We figured we had a short window in which we could use our 2016 tax return. Your info is good news indeed. Thank you, chasesfish!
Title: Re: Let's talk about DAFs
Post by: Dicey on December 31, 2017, 04:47:54 PM
Banker here - Charitable deductions are reported on your schedule A and *after* your AGI.  It won't hurt you on qualifying for a rental
Oh boy! We found a possible rental yesterday that we're going to make a lowball offer on. We figured we had a short window in which we could use our 2016 tax return. Your info is good news indeed. Thank you, chasesfish!
Oh well, there's an offer ahead of ours. Now we have to wait and see. Therefore, yesterday I loaded 15k into our Fidelity Giving Fund. With our YTD charitable donations, we probably couldn't write off a whole lot more than that + that was as much as I could sweet talk DH into. Good to have gotten something set up before it all goes away, in effect. I do have some very old stock that is set up as a DRIP. There's no way I could have flipped it fast enough to make the year-end deadline. I'll donate it next year. I won't get the write off, but I will avoid the cap gains haircut.

Then late yesterday, our realtor at home called. She's got a lead on hoarder house that's just a few blocks away from ours. Eh, maybe we'll end up doing a flip close to home. One door closes, another opens...
Title: Re: Let's talk about DAFs
Post by: chasesfish on January 01, 2018, 06:46:03 AM
@Dicey Don't downplay $15,000, that's a huge f-ing amount of money!  Congratulations! 

Best wishes on the rental, I'm still kicking myself I've never owned (kept one).  1st house was meant to be a rental, but had too big of a tax free gain and corporate relo paying it so I had to take the money.
Title: Re: Let's talk about DAFs
Post by: MustacheAndaHalf on January 05, 2018, 09:31:23 AM
Consider funding the donor advised fund (DAF) with stocks / mutual funds you've held more than a year.  When you donate cash, that cash is subtracted from your tax bill (a tax deduction).  When you donate stock (without selling), you skip selling for 15% tax and get the amount subtracted from your tax bill. 

Most charities can't handle being directly gifted shares of stock.  So another DAF benefit is turning appreciated stock into cash to donate.

I also recommend donating anonymously and ending the endless stream of mail that comes from donors who reveal their name and address.  With a DAF, your donation can simply come from Fidelity Charitable and the charity otherwise doesn't know who made the donation.
Title: Re: Let's talk about DAFs
Post by: boarder42 on January 05, 2018, 09:35:39 AM
Consider funding the donor advised fund (DAF) with stocks / mutual funds you've held more than a year.  When you donate cash, that cash is subtracted from your tax bill (a tax deduction).  When you donate stock (without selling), you skip selling for 15% tax and get the amount subtracted from your tax bill. 

Most charities can't handle being directly gifted shares of stock.  So another DAF benefit is turning appreciated stock into cash to donate.

I also recommend donating anonymously and ending the endless stream of mail that comes from donors who reveal their name and address.  With a DAF, your donation can simply come from Fidelity Charitable and the charity otherwise doesn't know who made the donation.

yeah this is all well and good but for the most part this topic is mostly dead for 90% around here who wont be hitting the standard deduction limits under the new tax code anymore.  DAFs should now be large lump sum invested in every 4-5 years so you can reap tax rewards as much as possible
Title: Re: Let's talk about DAFs
Post by: Dicey on January 05, 2018, 09:49:11 AM
Consider funding the donor advised fund (DAF) with stocks / mutual funds you've held more than a year.  When you donate cash, that cash is subtracted from your tax bill (a tax deduction).  When you donate stock (without selling), you skip selling for 15% tax and get the amount subtracted from your tax bill. 

Most charities can't handle being directly gifted shares of stock.  So another DAF benefit is turning appreciated stock into cash to donate.

I also recommend donating anonymously and ending the endless stream of mail that comes from donors who reveal their name and address.  With a DAF, your donation can simply come from Fidelity Charitable and the charity otherwise doesn't know who made the donation.

yeah this is all well and good but for the most part this topic is mostly dead for 90% around here who wont be hitting the standard deduction limits under the new tax code anymore.  DAFs should now be large lump sum invested in every 4-5 years so you can reap tax rewards as much as possible
Yup. It's a whole new world. That's spoken in a dull monotone, not sung in a Disney lilt.
Title: Re: Let's talk about DAFs
Post by: katsiki on January 05, 2018, 01:41:14 PM
I plan to fund the DAF every other year.  It should work out with my existing deductions.  YMMV of course.

In other news, Fidelity processed the check pretty quickly, considering they likely had a high volume.  I already setup my first grant.  Can't wait to see it approved and sent.  This is great!
Title: Re: Let's talk about DAFs
Post by: Dicey on January 05, 2018, 01:48:37 PM
@Dicey Don't downplay $15,000, that's a huge f-ing amount of money!  Congratulations! 

Best wishes on the rental, I'm still kicking myself I've never owned (kept one).  1st house was meant to be a rental, but had too big of a tax free gain and corporate relo paying it so I had to take the money.
I'm not downplaying the money, but we have plenty of ready cash, and I have received part of a small inheritance this year that would have covered the difference. We met with our CPA last week and we could have given more, but I couldn't talk DH into the max max. He just freaked out over what a large percentage of his 2017 earned income it would have been (i.e. different anchor point for him than for me).

I didn't marry until I was 54. Now we're FI, I'm FIRE, but we live comfortably on his income. He's easygoing about money, so this is the first time in 5 years of marriage that we've had to negotiate over an expenditure, which was 1) totally weird and 2) had the spillover effect of reminding us just how damn lucky we are to have found each other. It also happened rather suddenly, so he didn't have time to process it. (He's a thinker.)  Also, charitable giving at the level I am more accustomed to is a new concept to him, so I really can't complain. I honestly think if I'd asked for a huge diamond, or a new car, he would have had an easier time saying yes. It's a total MPP, but it's about a DAF, so here it is.

----------------------------------

Despite lots of looking, we didn't identify a property, but our other realtor called with a lead on a hoarder house three blocks from our primary home, so there may still be some real estate fun on the near horizon.

One of the things we love about our rentals is that we choose great tenants. We're even still friends with the people who bought our flip house. It's like each new property we buy is a chance to make new friends.  Unexpected, to be sure, but that's what comes from choosing your tenants very carefully.

In other news, Fidelity processed the check pretty quickly, considering they likely had a high volume.  I already setup my first grant.  Can't wait to see it approved and sent.  This is great!
I had a similar experience with Fido, and am looking forward to building this account.