Twelve reminders for the DAF client meeting

WealthManagement.com has published a twelve-item checklist for advisors who work with donor-advised fund clients. The list reads like a practice-management to-do list: review succession plans, consider non-cash assets, and revisit contribution timing. The site notes that accounts may have been funded recently or ten or twenty years ago, and options and rules change.

According to WealthManagement.com, the Donor Advised Fund Research Collaborative's annual report shows donors grant out 20% to 25% of DAF balances in an average year. Some donors make few or no grants. The site adds that most DAF holders opened their accounts for philanthropic reasons rather than tax benefits, and that advisors are in a good position (and have a responsibility) to help maximize that giving.

Successor and disposition plans are usually set when a DAF is funded, and most sponsors don't press donors to revisit them, says WealthManagement.com. A child named as successor years ago may not know about the role, may not care, or may support different causes. A charity listed as beneficiary may no longer match the donor's giving. Donors who named nobody leave the distribution decision to the sponsor after death. Changing any of these designations is free.

The rest of the list widens the definition of a contribution. Donors who put in cash or public stock may not realize that real estate, privately held C corporation or S corporation shares, and cryptocurrency are eligible too. Changes in tax law make bunching contributions worth considering, and pre-retirees may want to give more while paychecks and deductions are larger. Naming the DAF as the charitable beneficiary of a retirement account also reduces the tax bill that would hit heirs.

Taxes, estate planning, and philanthropy all meet in this checklist. With most DAF sponsors not doing the reminding, the advisor's calendar has to. The one reminder that costs nothing to change is the one to ask about first.