East Texas Communities Foundation is a public charity that manages over 450 unique charitable funds. These 450 funds are not separate legal entities like charitable trusts would be at a local trust department. Neither are they accounts which an individual owns, like a checking account or investment account at an investment firm or bank. But they share some features of a charitable trust, investment account and checking account, under the administration of a non-profit public charity, which makes them inexpensive and easy to use. These funds make grants to charities in East Texas and around the United States, benefiting people here in our neighborhoods and in the furthest corners of the globe.
We work with donors to create scholarship funds for area students, endowment funds supporting specific local charities, field of interest funds which make annual grants in keeping with a donor’s wishes, and donor-advised funds which facilitate routine grantmaking for individuals and organizations. Our motto is “Simplified Charitable Giving” and our donor-advised funds epitomize this objective. For over 36 years ETCF has administered donor-advised funds (DAFs) for individuals in our community looking for simple ways to maximize their charitable giving.
The final quarter of the year is always active at ETCF as donors and professional advisors work to put charitable plans in action before the calendar year tax deadline on December 31st. A common action step in charitable planning includes establishing a DAF to maximize philanthropic impact and tax efficiency. A unique kickoff event for fourth quarter fundraising and the use of DAFs is DAF Day, held this year on October 9th. According to Chariot, a DAF technology provider, “In 2024, a group of leading nonprofits, DAFs, and fundraising technology providers got together and created DAF Day on October 10 to help address the DAF awareness problem. [The problem being, DAFs “…are not very well known or understood.”] The movement now has over 1,000 nonprofits participating, reaching millions of donors to educate them about DAFs and encourage them to join this collective moment to demonstrate unprecedented generosity with Donor-Advised Funds.”
DAF Day 2025 is a good opportunity to reflect on why DAFs are so helpful for generous people. At ETCF, our five reasons why you should consider establishing a DAF if you don’t already have one are:
First, simplicity. A DAF is easy to set up and use. The best analogy is to think of a DAF as a charitable checking account. Money deposited into the DAF can be granted to public charities with a simple recommendation made on paper (like you would write a check) or online (like you would buy something using a credit or debit card).
Second, DAFs can help donors solve timing issues to maximize tax advantages of charitable giving. Contributions can be made into a DAF when it is most appropriate for a donor, maximizing their tax deduction in a given year. Grants from a DAF to your favorite charities can follow a different time schedule over months or years. A practical technique used by many donors is to contribute two-years worth of charitable contributions into a DAF at one time, every other year. Grants are then made weekly, daily or periodically over the next two years, then the fund is replenished. This technique allows a donor to maximize their itemized deductions every other year, and take the standard deduction in the following year. In fact, recent tax law changes in Trump’s One Big Beautiful Bill have set the stage for loading up a DAF in 2025 before new tax provisions are implemented in 2026 that will reduce the tax savings on charitable giving.
Third, the balance of a DAF can be invested and grow tax-free. ETCF offers seven investment options and we can even work with your trusted investment advisor when certain conditions are met. Your DAF can earn income and appreciate in value, allowing your charitable giving to potentially exceed your original gift.
Fourth, ETCF and many other DAF sponsors can accept a wide variety of assets, including mineral interests, real property, business interests, cryptocurrency and securities. Gifts that would be difficult to dole out to multiple charities can be easily contributed to a DAF, sold, and the proceeds invested and made available for a wide variety of grants over a longer period of time. Before you sell a business or any real property, if you are generous, you should consider how a DAF can help you minimize taxes and maximize your charitable giving resulting from such a transaction.
Finally, a DAF allows you to work together with your family, over multiple generations, or even anonymously, to align your giving with your values, faith and traditions. A DAF is a tool that can make giving easier and unleash the full measure of your generosity.
If you have never considered opening a DAF, or if you are in the process of considering different DAF providers, we would love to have a conversation with you to discuss how a DAF at your local community foundation might help you reach your charitable goals. Perhaps DAF Day 2025 is the reminder you need to explore whether opening a donor-advised fund is your next best opportunity to Give Well.
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