As you advise clients on charitable giving, you’re likely aware of the growing popularity of the donor advised fund as a flexible, tax-efficient tool for philanthropy. Many families appreciate how DAFs can streamline giving, foster family engagement, and serve as a launchpad for deeper community impact. 

We engage with many professional advisors — attorneys, accountants and financial planners — who work with clients using community foundations in a variety of ways, ranging from contributing to important local initiatives to making qualified charitable distributions from IRAs, and beyond. 

Through our work with advisors, we have discovered an interesting trend – although clients are familiar with NCCF, they simply did not know that the community foundation could help them in multiple ways, including establishing a DAF to support favorite charities. Some of these clients had already established DAFs through other financial institutions. 

It’s easier – and more beneficial – than you might think for your client to move a donor advised fund to NCCF! Here’s what you need to know: 

Tax and administrative advantages are the same 

NCCF offers DAFs with the same tax and administrative advantages as other providers, including: 

• Online access for clients to view fund balances, contributions, and grant history 
• Simple grantmaking process to qualified charities 
• Consolidated tax reporting, often with a single year-end letter for all contributions and grants 
• Comprehensive back-office support for administration, tax receipts, recordkeeping, and compliance with 501(c)(3) requirements 
• Favorable tax deductibility for contributions, including gifts of cash, securities, and other assets

Added value at the community foundation 

Unlike many donor advised fund sponsors, the team at NCCF offers a suite of personal, locally-informed services that can enhance your clients’ philanthropic strategies, such as: 

• Personalized service from staff experienced in structuring complex gifts such as appreciated stock, real estate, closely-held business interests and estate gifts 
• Local expertise on community needs, nonprofit effectiveness, and high-impact grantmaking 
• Deep engagement in specific issue areas, including educational opportunities and hands-on involvement for clients and their families 
• Impact measurement support to help clients track and communicate the outcomes of their giving 
• Assistance building giving traditions with family philanthropy options 
• Family and corporate philanthropy services to foster long-term, multi-generational charitable engagement 
• Successor advisors allow grantmaking to go out to three generations 
• Administrative fees that are reinvested in the community, supporting local operations and amplifying the community foundation’s mission 
• Direct access to local experts who can research and recommend causes aligned with your clients’ goals 

Staff with deep community roots who maintain close relationships with nonprofit leaders and stay attuned to emerging needs

What next? 

The steps to transfer a donor advised fund are surprisingly simple:  

1. Work with our team to establish a donor advised fund. Your client can mirror the terms of their existing DAF or adjust successor advisors and legacy provisions based on their charitable intentions. Our team will walk through the process with you and your client.  
2. Work with your client to request a grant from the DAF provider. Depending on the provider, this can sometimes be completed all online. Designate NCCF (and reference the new donor advised fund if possible) as the grant recipient. 
3. Your client may be able to grant the entire balance in one transaction. If not, most of the balance can be transferred to fund the new donor advised fund, and you can work with your client to transfer the rest later.  
4. Before closing the DAF at the other provider, your client should download grant history and contribution information for future reference and tax documentation. Note that transfers between donor advised funds are tax-neutral; these transactions are not taxable events.  

We look forward to working with you and your clients to make the most of their charitable giving, especially by establishing a donor advised fund at NCCF to serve as the cornerstone of the client’s charitable giving plan. With a donor advised fund as a baseline, your client can begin to tap into the many ways NCCF serves as a home for charitable giving, from strategic grantmaking to legacy giving and everything in between. 

This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.