As a financial advisor, knowing when to introduce a donor-advised fund (DAF) can elevate your client relationships and enhance their tax strategy. Here are the most common situations when a DAF is the perfect fit:
5 Client Scenarios When a Donor-Advised Fund (DAF) Makes Sense
Rebalancing a Portfolio Offload appreciated stock into a DAF for tax-efficient giving while supporting the causes your client cares about.
Managing Concentrated Positions Got a client with a concentrated stock position? Recommend donating a portion to a DAF—maximizing tax benefits and diversifying their holdings at the same time.
Windfall or High-Income Year Whether from a bonus, stock options, or a liquidity event, a DAF offsets the tax burden while allowing your client to donate strategically over time.
Sale of a Business Clients selling a business? Have them set up a DAF before the sale to reduce capital gains taxes and lock in charitable benefits.
Estate Planning A DAF ensures your clients' legacy by involving the next generation in philanthropy while offering flexibility to give to multiple charities.