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Post by Admin/YBB on Jan 14, 2021 7:42:11 GMT -6
#DonorAdvisedFunds [DAFs] function like one’s own personal foundation but without the expenses & headaches of actual foundations. Tax-deductible contributions can be made in cash or with highly appreciated securities [but there are income-related limits] – one saves on capital gains tax & gets itemized deduction for full amount. There is tax-free growth within the DAF. Most DAFs offer limited menus of funds; any securities contributed in-kind are sold by the DAF ASAP. Contributions are considered completed & irreversible gifts & are out of the estate of the “OWNER”/GRANTOR/DONOR [but clawbacks may apply in some cases]. Term “owner” is used loosely for DAFs & indicates limited ownership interests – those of recommending GRANTS/GIFTS/DONATIONS, managing allocations within the DAF & designating successor “owners”. Total annual expenses include the top-level expense ratio [ER] plus the ERs of the underlying funds.
Grants can be made at own pace. “Owner” cannot receive any personal benefits in exchange for grants. Sponsors follow a verification process if they are making a grant to a grantee for the first time. There may be prompts by sponsors if no grants have been made in a few years. Grants can be recommended only for IRS approved charities & sponsors provide search services [GuideStar/Candid, Charity Navigator, Giving Compass, etc] for that purpose. Sponsors also have master/general charitable funds & the DAFs can make grants to those; the DAFs merge into these master funds after there are no surviving “owners”. The IRA QCDs [qualified charitable contributions] cannot go into the DAFs. There are controversies relate to hoarding of funds within the DAFs, using one DAF to fund another DAF, etc. There may be some reforms down the road. #PersonalFinance , 1/14/21 AM.
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Post by Admin/YBB on May 19, 2021 19:14:16 GMT -6
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Post by Admin/YBB on May 25, 2021 7:59:24 GMT -6
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Post by Admin/YBB on May 29, 2021 18:21:00 GMT -6
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Post by Admin/YBB on Jun 14, 2021 19:56:39 GMT -6
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Post by Admin/YBB on Jul 15, 2021 10:53:39 GMT -6
A followup summary piece from M*. www.morningstar.com/articles/1045661/our-advice-on-donor-advised-funds(highlight link text--Go to http://www....; or highlight link text--copy (don't copy link address)--paste in a new tab to open) " Dziubinski: So, Amy, you've recently taken a deep dive into three of the largest donor-advised funds from Schwab, Fidelity, and Vanguard. How do they stack up against each other or compare? Arnott: They're pretty similar overall. Fidelity and Schwab are the most accessible for smaller donors because they don't have a minimum contribution amount. Vanguard has a $25,000 minimum for initial contributions and $5,000 for additional contributions. But it also charges lower fees for higher account balances. And all three of these major donor-advised funds have a pretty broad range of investment options, so you can either invest in a preset diversified portfolio with a specific risk level or in single-asset funds that you can use as building blocks to put together your own portfolio. Dziubinski: Based on sort of the entire package of each of these from Fidelity, Vanguard, and Schwab--taking into account costs, investment variety, investment minimums--is there one that sort of stands out? Arnott: Yeah, if you can afford the $25,000 minimum, Vanguard's donor-advised fund is probably the best option. It has the lowest costs and the strongest investment lineup. But Fidelity and Schwab are decent options, too, so if you already have an account with one of those firms, it can be easier to set up a donor-advised fund under the same umbrella."
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Post by anitya on Nov 15, 2021 22:24:24 GMT -6
For Schwab DAF, search Schwab Charitable on the Schwab site or go to www.schwab.com/donor-advised-fund if the link works go to www.schwabcharitable.org (see Admin reply to this message) The account opening process allows one to name a Successor or Charitable Beneficiary. I thought it is better to name a charitable beneficiary to receive the remainder of the assets in the account rather than name a successor individual who may give to charities that I would not have. Not sure if there are any pros and cons with one or the other. In terms of investment pool, I chose the Total Market Equity Index Pool, with the goal of maximizing the account balance over time and get to the Professionally Managed Account in not too distant future. I was tempted to select Large Cap Equity Managed Pool, which has a 0.60% extra investment fees, but I could not find past performance to compare to see how it stacks up. Good to get your experience / knowledge / thoughts on each of the above topics. P.S.: I am presuming the Charitable Beneficiary does not have any claim to the assets while I am living.
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Post by Admin/YBB on Nov 15, 2021 23:04:14 GMT -6
Schwab Charitable has better info. Legally and technically, Schwab and Schwab Charitable are distinct operations. www.schwabcharitable.org/Funds with tickers are in the link below. I have some in LC PRILX, an active, mild ESG with well-known manager (Todd Ahlsten, a current member of Barron's Annual Roundtable). I have most in balanced JABAX. www.schwabcharitable.org/investment-optionsSuccessor issue. If you want the DAF to continue after you, name a person (relative, close friend) as successor. If you want to terminate the DAF after you, you can name a charity or just the giant Schwab Charitable pool. I have interest in continuing my DAF, so besides I, my wife and daughter are successors AND they also have current powers to make grants. My daughter is already doing so for several years. She also consults with her daughter (my granddaughter) and I will add granddaughter when she reaches a majority age. My intent is early personal finance training and education. The successors can be changed, but if there is no successor, the giant Schwab Charitable pool is the default successor, and that may be irreversible after you.
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Post by anitya on Nov 16, 2021 1:54:52 GMT -6
Thanks. When I completed the DAF application by searching schwab.com, Schwab automatically placed the new DAF account among my linked accounts (with taxable and IRA). Now, I select the DAF account (Charitable Gift Account) from the menu of accounts when I sign in and the home page of that account at the top has the following tabs / choices: Account Grant Contribute Invest Tools Services. I click on Invest and it displayed all the funds available to invest. Clicking on any of the funds takes one to the fund's card. Clicking on Investment Pool Performance displays a table of performance of all funds. During the entire process not once was I taken to www.schwabcharitable.org and have stayed within Schwab.com (https://client.schwab.com/app/charitable/summary/#/overview for the DAF account). It probably has to do with my single sign on. Even when I tried to log in using shwabcharitable.org, I was automatically taken to schwab.com login page. I will try to remember to check www.schwabcharitable.org from time to time for new announcements and updates about the DAF program.
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Post by Admin/YBB on Nov 16, 2021 8:05:34 GMT -6
Schwab's single sign on is same for me and the Schwab Charitable is in the list with taxable and tax-deferred/free accounts (it keeps track by the Social Security numbers). But look closely at the top blue menu bar of Schwab Charitable - it looks different from those for regular accounts; on the left it says "Schwab Charitable" and on the right it says "Return to Schwab.com". All the call/contact numbers for Schwab Charitable are also different. For regular brokerage accounts, the menu bar changes to mostly black and the menu choices are all different. If you also have Schwab Bank account, it is also in the list but the look and feel of that is different. Schwab Charitable is now better integrated/presented than before when it was more difficult to go back and forth. BTW, you can also customize the Schwab account list and totals display from Settings by choosing to hide/display, include/exclude.
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Post by anitya on Nov 17, 2021 13:48:35 GMT -6
All of that is correct and is shown as an APP within schwab.com (see the URL in my previous post) but I think one should check www.schwabcharitable.org (homepage) from time to time for new announcements and updates about the DAF program that are not necessarily displayed in the account. I was not complaining - simply letting the readers know for their edification.
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Post by anitya on Dec 24, 2021 15:47:02 GMT -6
When one makes a grant to a charity through the Schwab Charitable account, does the account get a receipt back from the charity similar to how we get when we write a personal check? I am guessing not because the account does not need a tax deduction and Schwab takes responsibility for legitimate disbursements and record keeping but I thought I should ask.
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Post by Admin/YBB on Dec 24, 2021 17:41:27 GMT -6
anitya , your question about acknowledgement of DAF grant is simple, but the answer is complicated. 1. The IRS doesn't need anything on the grant. All the IRS cares about is the record/receipt when you add money to the DAF and nothing beyond that. 2. Schwab sends a letter (with a check) to the charity that is posted on the account (and also mailed to the DAF owner) that says among other things that a) the charity should NOT provide any receipt to the donor, b) NO correspondence should be sent to Schwab Charitable. 3. When you make a grant, there is a section on how the charity should acknowledge the grant. Options are, from memory, a) the formal name of the DAF, 2) name(s) of registered donors on the account, c) anonymous, d) custom/other. So, for example, when my daughter makes a grant with the involvement of my granddaughter, she may use the custom/other option to indicate to acknowledge only my granddaughter at her address. Charity doesn't have to do anything, but if there are clear instructions, they do like to send acknowledgement in the hope of having a future relationship. If the grant is anonymous, then the charity cannot figure out who to acknowledge.
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Post by anitya on Dec 26, 2021 15:15:13 GMT -6
Thanks, Yogi. I will ask for an acknowledgement under the formal name of the DAF as a backstop to any mistakes at Schwab - I expect it to be highly automated and not result in any mistakes but I always like to catch any mistakes early on, rather than Schwab catching them and fixing them on their own.
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Post by anitya on Jan 10, 2022 15:48:48 GMT -6
Hi,
I sent Schwab Charitable a message (through the account) asking about timing and process to transfer securities (stock) from TDA brokerage to Schwab Charitable. Their recommendation is to transfer directly from TDA using TDA's transfer out request form to the Schwab Charitable account. They claim that if Schwab Charitable were to initiate the transaction, it will take 3-6 weeks. They did not address an option of TDA brokerage to Schwab brokerage to Schwab Charitable.
Any thoughts / guidance / sharing experience from this forum would be appreciated.
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