4 Reasons to Open an ImpactAssets Donor Advised Fund Before Year End
Act now. Build your strategy over time.
Key Takeaways
- Take advantage of the tax benefits of a Donor Advised Fund (DAF) during your year-end planning.
- Fund your DAF with cash, publicly traded stock or private assets.
- With ImpactAssets, your philanthropic assets are immediately invested for good.
- Evolve your granting and investing strategy over time; ImpactAssets supports you as a long-term partner.
Some of the most important decisions about your year-end giving can wait until after December 31. You do not need to choose every nonprofit, determine every grant amount, or have a comprehensive giving strategy.
All you need to do right now? Decide how much to give before the year closes. An ImpactAssets Donor Advised Fund (DAF) lets you benefit from the tax-year deadline without rushing the decisions that deserve more time.
But there are important reasons to take that first step now, even as you build your strategy over time.
The approaching year end does not require a finished philanthropic roadmap. It just requires a timely first move.
Reason 1: Use the tax year and recent tax changes intentionally
Longstanding federal rules incentivize giving and charitable contributions before December 31 because these actions can reduce your taxable income.
Furthermore, recent tax changes can incentivize bunching several years of intended giving into one. Under provisions of the One Big Beautiful Bill Act (OBBBA), if you itemize, you can only deduct the portion of your qualified charitable donations that exceeds 0.5% of your adjusted gross income. That may make it advantageous for some taxpayers to “bunch” future years of planned giving into one year’s DAF contribution. This single contribution to a DAF can then seed grants and impact investments for years to come. Consult with your advisers to figure out whether bunching makes sense for you.
Explore how the One Big Beautiful Bill Act (OBBBA) may affect your charitable giving.
At ImpactAssets, we know that tax efficiency is not always your end goal, but it can allow for more capital to be made available for the causes you care about.
Reason 2: You can donate more than cash! Complex assets can unlock additional tax advantages, expanding your potential to do good
Most people think of cash or publicly traded stock when opening a DAF. But ImpactAssets is equipped with the infrastructure and experience to accept a range of complex assets, including private company equity, pre-IPO shares, cryptocurrency, real estate, fine art, collectibles, and other illiquid or atypical assets. Read more about how to unlock noncash assets for your DAF.
If your complex assets have appreciated, donating them may offer capital gains and charitable deduction advantages based on their fair market value, depending on the asset and your circumstances. This type of donation gives you the ability to convert one complex asset into proceeds that can support a comprehensive giving strategy over time.
Depending on the asset, this contribution process can take time, especially if a sale or other liquidity event is approaching. Starting early and working with us can help you successfully deploy this strategy.
Join us for an upcoming live Q&A and get your questions answered.
WHAT MUST HAPPEN BEFORE YEAR END?
- Choose the asset(s) you want to contribute, even complex ones
- Complete your ImpactAssets DAF application
- Finalize the contribution and transfer
WHAT CAN HAPPEN OVER TIME?
- Refine your giving and investing priorities
- Recommend grants and investments as opportunities emerge
Reason 3: Your donated assets will drive impact from Day One
Conventional DAFs allow you to contribute now and recommend grants later. But an ImpactAssets DAF adds a critical dimension: ungranted assets begin doing good in the world immediately, even before you’ve chosen your first charitable recipient.
How do we do that? Impact is embedded within all ImpactAssets DAF investment options. Across all our investment options, we select funds and companies for their potential to deliver positive real-world outcomes alongside financial performance. That means your assets can help drive progress in sectors like the clean energy transition or healthcare and community wellbeing, while you determine other charities you would like to support. That’s a contrast to conventional DAFs that often invest your assets in index funds, which may invest in companies that conflict with your values or charitable goals.
Because ImpactAssets puts your DAF assets toward good upon account opening, you do not need a fully developed giving plan right away. Building a portfolio of investments and developing a granting strategy takes time, and our approach means you don’t need to rush.
Reason 4: You’ll have a deeply experienced partner for the rest of your DAF journey
When you open a DAF, you are not just choosing the sponsor. You are choosing a long-term partner for your philanthropic goals.
At ImpactAssets, we have a 15+ year track record in impact investing and grantmaking with $5B+ in assets under management and $2B granted to date. The breadth of our product and service offerings can support you as your goals and giving ambitions evolve, no matter where you are in your impact journey. The initial allocations you select can evolve into more customized pathways, including client recommended investments and public and private market opportunities — all within a unified strategy that aligns your granting and investing for greater impact.
In Summary
The approaching year end does not require a finished philanthropic roadmap. It just requires a timely first move.
At a time when many people are thinking carefully about the future they want to help shape, the ImpactAssets DAF offers a tax-efficient way to move from intention to action.
LEGAL AND PROGRAM DISCLAIMER: This is not a solicitation to buy or sell securities, nor a private placement offering pursuant to any private placement memorandum that must be issued to qualified investors. It is an informational description of charitably oriented, social purpose investment options that have been approved by ImpactAssets only for use in its donor advised fund asset base. It is only for use by its donors. This does not constitute tax advice. Please note there are a number of factors to consider when assessing the tax implication of gifts to charity. Individuals should consult with a tax specialist before making any charitable donations.
ImpactAssets Capital Partners PB LLC (“IA Capital”) is an investment adviser registered with the SEC. The content of this website is not a solicitation or offer to sell investment advisory services, nor is it a solicitation or offer to sell securities. All content of this website is for informational purposes only and should not be relied upon as investment advice. Information is subject to change at any time, and IA Capital is under no obligation to provide updates or amendments. Investment in securities involves the risk of loss. Past performance is no guarantee of future returns.
