How have you never looked into a donor advised fund if you're giving at that level of 10%. You're doing a disservice to yourself and your charity. Why give the govt more money than you have to?
I was under the impression that...a donor advised fund...I'll look into it more. But a couple of years ago when I first heard of the concept I read a bunch about it and decided it didn't align with my personal philosophy of giving, which is not as obsessed with efficiency as Mustachian giving. However, I could be wrong and have forgotten exactly how it works.
But don't you have to set up a fund first? And it's the interest, not the fund, that is donated? Something like that?
Yes you have to set it up, but grants are made from the income and corpus (the money you contribute).
Potential situations where they can be helpful:
1). You don't itemize your deductions, but you are close. By using a DAF you can make two years of contributions in year 1, itemize, but still give the same steady stream of contributions to charities out of the DAF in year 2. Then you can potentially itemize every other year.
2). You receive a large chunk of taxable income in a year. Make your charitable contribution to a DAF in the year of recognition to match up the deduction with the income, give you time to consider what charitable causes you with to support, and/or annuitize your giving.
3). You have appreciated assets that you want to use for charitable purposes, but aren't easily handled by the charities you want to support. Things like real estate, closely-held business interest, even stocks/bonds can be issues for smaller organizations. By contributing those to the DAF you can use the resources and sophistication of the DAF administrator to liquidate those assets, get a deduction at Fair Market Value for the property, not recognize any gain on your return, and give the organizations you support cash.
Funds in the DAF can be invested as well, but I believe there is a holding period limitation like 5 years if I remember correctly. In other words, if you contribute a rental property, lets say, then that property would need to be sold within 5 years of contribution. (not that you'd want to contribute rental real estate, as that can cause other tax issues in a DAF)