Can Generosity Be Fun?
I woke up this morning wondering — can generosity actually be a form of fun?
About this time each month I ask myself: what should I add to my journal? A life rooted in faith seems to find its strength in questions and its peace in answers — and sure enough, I woke up this morning to my answer. Here we go!
Part of our personal financial program includes a Donor Advised Fund (DAF), in our case hosted by Fidelity Investments. My first look at email this morning, there sat a report from Fidelity on their fund. You can read the full 2026 Giving Report here.
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What Is a Donor Advised Fund (DAF)?
A DAF is a personal investment fund that allows you to deposit funds at the optimal time for a tax deduction — and from within that account, you can donate to charitable organizations at a time you choose.
DAFs have been around since the 1930s, but in the mid-1990s Vanguard, Fidelity, and Schwab launched programs available to their brokerage account clients. In 2006, revisions to IRS rules provided greater detail and better defined how a DAF works.
Today there are almost 2 million individual DAF accounts, and the average balance is over $200,000.
If you clicked on the Fidelity report above, you'll see the magnitude of this tool for generosity.
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What You Need to Know
You receive the tax deduction when funds are moved into your DAF.
This is a great tool to optimize year-end tax strategies — before or without choosing what charitable organization will receive the funds. And appreciating investments can continue to grow while in the DAF, so you can give more!
Simplified record-keeping.
Even though your tax deduction occurs at the time you contribute to your DAF account, multiple charitable gifts from the account will be wrapped up in one simple statement.
It's a one-way program.
Once you transfer investments into a DAF, all you can do is donate them from there to a charitable organization.
No double-dipping.
Since the funds you transfer are reported as charitable giving when you add them to your fund, you cannot claim the gift again on your tax filing — even though an organization may send you a donation receipt.
Low minimums.
Minimum DAF contribution amounts vary by organization, and most have no minimum at all.
Easy to add organizations.
If your preferred charity isn't listed within your DAF's directory, it's not difficult to set them up — provided they are a registered non-profit.
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Getting Started
Contact your investment adviser to set up a DAF account.
Agree with your advisor on a funding level and/or specific contribution amounts.
Use the online search tools within the DAF to set up contributions to a charity of your choice.
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Good Times to Use Your DAF
When an additional deduction will move you to a lower tax bracket.
When a significant taxable event occurs and you plan to donate a portion of those proceeds in the future.
The year before you plan to retire — assuming your tax bracket will be going down!
When a charitable cause has not yet been fully organized — the DAF holds the funds until they can be properly given.
When you want to turn the tax consequence of highly appreciated stocks into a significant tax deduction.
I know — that's a lot of bullet points. This one reads more like a PowerPoint than a journal entry!
But having used a DAF for more than five years, I can't encourage its use enough.
Several years ago, in November, our financial advisor asked if we had some thoughts about year-end generosity. I said no. The next morning I had five groups that Deborah and I agreed could use a gift. So I called our advisor, gave him a dollar amount to move into the DAF. Ten minutes later he called back laughing — there was a specific stock we had purchased 13 months earlier, and it had grown by a factor of five to be exactly the amount I had requested he move into the DAF.
So cool. And so fun.
Just now, it reminds me of one of my favorite quotes by G.K. Chesterton:
"And the more I considered Christianity, the more I found that while it had established a rule and order, the chief aim of that order was to give room for good things to run wild."
Let's be generous — and run wild!
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