Case Study B:
Establishing a Donor-Advised Fund
IMPORTANT INFORMATION: The case study presented is hypothetical and for illustrative purposes only. It does not represent an actual client, and no representation is made that any investment strategy will achieve similar results. Investment outcomes may vary based on individual circumstances, objectives, and market conditions. All investments involve risk, including the possible loss of principal. Past performance is not indicative of future results.
Organization
A family seeking to organize their charitable giving and create a more structured approach to long-term philanthropy.
Challenge
The family regularly supported several nonprofit organizations but made donations informally throughout the year. As their income and investment assets grew they wanted a more coordinated giving strategy and greater tax efficiency. They were interested in using a donor-advised fund but were unfamiliar with how the structure worked, how contributions should be made and how charitable assets could be invested once contribute.
Approach
Gaard worked with the family to evaluate charitable giving strategies and determine whether a donor-advised fund would support their goals. After reviewing options, the family decided to establish a DAF with a sponsoring organization.
Gaard assisted with opening the account and coordinating the contribution of appreciated securities into the fund. Discussions focused on how the DAF would be used to support ongoing charitable grants and how charitable assets should be invested within the account.
Gaard then developed an Investment Policy Statement outlining investment objectives, asset allocation guidelines, and liquidity needs based on the family’s expected grant schedule. A diversified investment portfolio was implemented within the DAF to support long-term growth while maintaining flexibility for future charitable distributions.
Outcome
The family established a donor-advised fund that now serves as the central structure for their charitable giving. Contributions can be made in tax-efficient years while grants to nonprofit organizations are recommended over time. The charitable assets are now managed within a disciplined investment framework aligned with the family’s long-term philanthropic objectives.