Why Alternative Assets Belong in Donor Advised Funds

What are alternative investments in the context of DAFs?
Alternative investments include private equity, hedge funds, venture capital, and private debt. These investment types can diversify portfolios and offer unique advantages for donor-advised funds.
Why consider alternative assets in a DAF?
- High Growth Potential: Alternative assets often provide high growth that is not tied to public markets.
- Diversification: They can act as excellent diversification tools, offering an additional premium.
- Steady Returns: Long-term lockups in private investments can create a consistent stream of returns over time.
What are the key considerations when using alternative assets in a DAF?
- Liquidity Management: Ensure adequate liquidity to cover:
  - Administrative fees
  - Capital calls
  - Planned charitable grants
- Tax Advantages: Significant tax benefits may be available, but consulting with a client or the Complex Assets team is recommended.
How can alternative investments enhance a charitable giving strategy?
By providing sustainable and scalable financial returns, alternative investments enable donors to maximize their philanthropic impact while maintaining financial stability.
Who should be consulted for guidance on alternative assets in a DAF?
Schedule a consultation with the Complex Assets team to understand the tax advantages and operational considerations in detail.