The following is a reprint of the JCF's Money Matters column, published in the March 19, 2025 issue of the Jewish Community Voice, titled, "Donor advised funds help simplify charitable giving":
As a reader of the Jewish Community Voice newspaper, it’s a safe bet that you understand the importance of tzedakah and how it shapes our South Jersey Jewish community and beyond.
Did you know that the Jewish Community Foundation, Inc. exists, in part, to provide a valuable service to you as a community member? The JCF can manage your tzedakah through a donor advised fund (DAF).
A DAF enables you to centralize your philanthropy, maximize your charitable tax deduction benefits, and plan for the future, all via an online account. It’s an effective way to go from haphazardly submitting checks and credit card donations to having your own “mini-private foundation,” without the expense and legwork that having your own private foundation would entail.
Let’s dive into some benefits and unique opportunities that a DAF can offer for so many donors, with a note of thanks to Jocelyn Borowsky, Esq. (referenced as “JB” below), who graciously provided some insights using her perspective as both an advisor on her own DAF with the JCF as well as her professional role as an estate attorney:
JB: “I appreciate the check-writing service provided by the DAF. It’s like my own personal financial secretary. I load up my DAF with a lump sum I expect to donate over the year, and then the JCF will actually write the checks for me via my DAF when I direct specific donations during the year. It also helps me simplify how I keep track of charitable donations for my income tax return.”
JCF: To add to this point, many donors who are in the financial position to do so will “bundle” their gifts for multiple years into one year to go into their DAF. By doing so, they earn immediate tax benefits for the current year, which can help them to exceed the standard deduction hurdle (currently $29,200 for married couples filing jointly or $14,600 for individual filers) in the current year, thus reducing their tax burden. Meanwhile, the DAF balance is professionally invested by JCF’s investment firm, SEI, and may even grow. The DAF advisor then recommends grants in the future, tax-free.
JB: “In addition, DAFs have become so popular for donors to use locally and nationally because a DAF is a very convenient way to make charitable donations, both during your lifetime and under your will. And this is true for high-net-worth individuals and everyone else. The nice thing about designating a DAF under your will rather than naming the charities directly in your will is that you can change your mind about the charities without having to amend your will.”
JCF: Indeed, a DAF with the JCF provides significant flexibility so that you can, for example, determine that after your lifetime, you’d like to designate the balance of your DAF to go into an endowment fund to benefit your selected charitable cause(s) for future generations or even pass your DAF over to your children or grandchildren to use for their philanthropy.
JB: “My high-net-worth clients like DAFs because they are much easier to work with than setting up a private foundation, which is like setting up a new company. You also have to apply for 501(c)(3) status. And then there are requirements as to how much must be distributed to charity each year. Further, the clients’ heirs may not be as enthusiastic about running the private foundation. In contrast, DAFs don’t require much time or energy to utilize.”
For these reasons and others, a DAF with the JCF may benefit you. Please contact me at (856) 673-2571 or dsnyder@jfedsnj.org or visit jcfsnj.org/daf today to learn more.
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