Donor-Advised Funds: Same Benefits, More Local Impact

As a professional advisor, you’ve likely helped many clients explore the benefits of donor-advised funds (DAFs) as a tax-efficient, flexible tool for charitable giving. With their ease of use, streamlined grantmaking, and potential for family engagement, DAFs have grown in popularity—and for good reason. But there’s one critical decision that often gets overlooked: Where the DAF is held.

While many clients may establish donor-advised funds through national financial institutions, they may not realize that a community foundation offers the same core advantages—plus several unique benefits that can elevate the giving experience.

If your client has a DAF with a national sponsor, they can easily move it to the community foundation without losing any tax benefits or functionality. In fact, doing so may give them more personalized service, local insight, and deeper philanthropic impact.

An Overlooked Opportunity

We’ve had conversations with a number of professional advisors who were surprised to learn that some of their clients—clients they believed were highly engaged with their local community—were using national DAF providers. When we connected the dots, we discovered something important: while these clients were familiar with the community foundation and even supported local causes, they didn’t realize we could host donor-advised funds as well.

This creates a major opportunity for advisors. With just a few simple steps, you can help your client transition their donor-advised fund to a local foundation, aligning their giving with a partner who understands the nuances of their community.

Same Core Benefits, Just More Local

A donor-advised fund at the community foundation offers the same tax advantages and convenience as one held by a national provider. These include:

Full deductibility for contributions of cash (up to 60% of AGI), appreciated assets (up to 30% of AGI), and other complex gifts
Online access to view fund balances, contribution records, and grant history
Consolidated tax documentation, with year-end giving summaries
Streamlined grantmaking to IRS-qualified public charities nationwide
Comprehensive administration, including IRS compliance, receipts, and recordkeeping

From a technical and compliance standpoint, your client won’t miss a beat. The transition is tax-neutral and doesn’t trigger any new charitable deduction or income reporting.

Added Value: The Community Foundation Advantage

While national DAF sponsors can provide a solid baseline, community foundations go further by offering high-touch, strategic support tailored to your client’s values and goals. Advantages include:

Hands-on support for complex assets like real estate or closely held business interests
Local knowledge of community needs and nonprofit effectiveness
Strategic grantmaking assistance and curated recommendations
Family and corporate philanthropy services to engage the next generation
Educational opportunities and forums featuring experts and community leaders
Impact tracking and storytelling so clients can see the results of their giving
Administrative fees are reinvested locally to support nonprofit capacity and civic leadership

Many clients appreciate that our staff have deep roots in the region. We know the nonprofit landscape and can provide valuable insights to align their giving with what’s needed most.

How the Transfer Works

Moving a donor-advised fund to the community foundation is easier than most people expect. Here’s a look at how simple it can be:

Step 1: Establish the New Fund

You and your client work with our team to create a new donor-advised fund. We can replicate the original fund’s name, fund advisors, succession plan, and grantmaking parameters—or help your client tailor these to better reflect their evolving goals.

Step 2: Recommend a Grant

Your client will recommend a grant from their existing donor-advised fund (e.g., at Fidelity Charitable, Schwab, or Vanguard) to the community foundation. Depending on the provider, this may be done completely online.

Step 3: Fund the New DAF

In most cases, the full balance of the existing fund can be granted in one transaction. If not, multiple transfers can be arranged. Once the grant is received, it is deposited into the newly created donor-advised fund.

Step 4: Download and Close

Before closing the original account, clients should download records of past contributions and grants for their files. The grant to the community foundation is a non-taxable transfer, meaning there’s no need to issue a new deduction or worry about tax implications.

Philanthropy That’s Personal

When clients transfer their donor-advised fund to the community foundation, they’re not just changing platforms—they’re gaining a partner. They gain advisors who know their hometown. They gain visibility into the real-world effects of their generosity. And most of all, they gain a deeper sense of purpose, knowing that their giving is aligned with what matters most—community impact.

To learn more or begin the process, reach out to our team. We’re honored to help you support your clients in building meaningful, lasting legacies—one charitable act at a time.

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