DAFs allow a donor to fund their preferred charities with a wide range of appreciated assets, including securities (e.g. stocks, bonds, stock options, pooled funds) and other eligible assets. The ability to make in-kind contributions can create a valuable tax deduction for highly appreciated assets. 

This creates a tax-efficient way to support desired causes, while relieving the donor of the additional administrative time and costs that are associated with annual charitable giving. At Guardian Capital Advisors LP, we have partnered with a DAF sponsor that is a registered charity and host administrator to establish this service on behalf of our clients. 

Key Benefits

  • Immediate donation tax benefit, with time to decide on a giving plan
  • Client maintains control of charitable destination and timing of donations
  • Centralized and simplified gifting to multiple charities 
  • Quick and easy setup, with less-expensive ongoing administration costs
  • Opportunities to engage in multi-generational family philanthropy 
  • Financial and personal privacy
  • Cost-effective solution for charitable giving 
  • Personalized private sessions to help determine appropriate giving methods and destinations

Once established, the donor has two options: 

  1. Utilize the DAF as a long-term entity, setting aside funds to donate over time, whether that be recurring or ad hoc donations, while receiving an immediate tax benefit at the time the funds are contributed to the DAF; or 
  2. Utilize the DAF as a flow-through to receive the tax benefit, immediately donating all contributed funds. 

Once eligible assets are transferred to a DAF, the assets are redeemed immediately, tax-free and invested into an advisor-managed portfolio. The Investment Policy Statement for the DAF Foundation Account will be established depending on whether option 1 or 2 is selected; the short-term flow-through option will be managed with a low risk tolerance to ensure the safety of assets to be donated in the near-term, while the second option will be managed as a long-term balanced portfolio to ensure growth and preservation of capital. 

Ways to give and benefit 

A DAF also allows for greater tax efficiency and flexibility around donations and privacy. 

The benefits to taking the DAF approach include less expensive administrative fees, the ability to pass on administrative responsibilities to the DAF sponsor and, most importantly, the ability to donate securities, including units of pooled funds, as an eligible investment. 

  • Redeem securities for cash to facilitate a donation; 
  • Donate cash directly to a public foundation who will manage it on your behalf and disburse it to the charitable community; 
  • Donate a wide range of appreciated assets directly to the charitable organization, including securities (e.g. stocks, bonds, stock options, pooled funds) and other eligible assets;
  • Register your own private foundation, which can be costly and time-consuming; or 
  • Set up a DAF 

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The information provided is for illustrative/educational purposes only. All investment strategies referenced in this material come with investment risks, including loss of value and/or loss of anticipated income. Past performance does not guarantee future results. This material is not intended to constitute legal, tax, accounting, investment or financial advice or a recommendation to buy, sell or hold a security, and should not be considered an offer or solicitation to deal in any product or financial strategy mentioned herein. Effort has been made to ensure that the material presented herein is accurate at the time of publication. The information discussed herein may not be applicable to or appropriate for every investor and should be used only after consultation with professionals who have reviewed your specific situation. 

Guardian Capital Advisors LP is a wholly-owned subsidiary of Guardian Capital Group Limited, a publicly traded firm listed on the Toronto Stock Exchange. For further information on Guardian Capital Advisors LP, please visit www.guardiancapital.com/private-wealth-management. All trademarks, registered and unregistered, are owned by Guardian Capital Group Limited and are used under license.