DAF recommendations?

[RonSwanson]

I am going to donate some equities to charity this year and want to use a DAF. Any recommendations for or against? I've seen Vanguard, Fidelity, and Schwab. The 0.60% fee looks about the same for all of them...

[jebmke]

I have one at Fidelity and VG. Our assets are all at VG so there is some advantage of using one where you hold your taxable assets. But this isn't critical. Fidelity has much lower minimum grants so it is very popular. Most of our donating goes out of the VG one. I set up the Fidelity one for a few smaller donations.

[stan1]

Fidelity and Schwab have lower minimum contributions and minimum grants.

The $500 minimum grant at Vanguard Charitable does not meet my requirements for giving. The $50 minimum grant at Fidelity Charitable or Schwab Charitable does.

Vanguard Charitable also requires $25K contribution to open an account; Fidelity and Schwab require a $5K contribution to open an account.

[DJZ]

I’m at Vanguard Charitable, because my other accounts are at Vanguard so transferring assets is very easy, all online. I’m very pleased with them. Other than the contribution and granting minimums being higher at VC, as described by Stan1, I doubt there is much difference.

[jebmke]

I would also add that having used both VG and Fidelity for grants in the last couple of years, the user interfaces are similar - not a differentiating factor. They both get the job done.

[Hockey10]

I have been using Fidelity for the past 4 years for a DAF. I have no complaints. The website is very easy to use and there have been no problems with any of my transactions. It helps that I have my taxable account at Fidelity, which allows for a very simple transfer of appreciated stock to the DAF.

[interwebopinion]

We use Vanguard's, and so far no issues.

[Duckie]

I am going to donate some equities to charity this year and want to use a DAF. Any recommendations for or against? I've seen Vanguard, Fidelity, and Schwab. The 0.60% fee looks about the same for all of them...

Fidelity
• Minimum initial contribution to open account -- $5,000
• Minimum additional contributions -- No minimum
• Minimum grant to charities -- $50

Schwab
• Minimum initial contribution to open account -- $5,000
• Minimum additional contributions -- $500
• Minimum grant to charities -- $50

Vanguard
• Minimum initial contribution to open account -- $25,000
• Minimum additional contributions -- $5,000
• Minimum grant to charities -- $500

I chose Fidelity because of the lower minimums.

[wander]

We use Fidelity.

[FIREchief]

I use Fidelity. Our other accounts are also at Fidelity, so donation of appreciated shares is simple, quick and paperless.

[Rajsx]

We transferred our DAF account from Vanguard with Vanguard Funds to Fidelity, the reason being the donations can be smaller than $500 if we so choose, otherwise no problems with either, good luck.

[RonSwanson]

Thanks everybody. The stock would be coming from a Schwab account. Not sure if this makes it worth going with them or not, I assume I can transfer it to any of the funds perhaps with more paperwork...

[drzzzzz]

Fidelity - lower minimums for giving and donations. We transferred appreciated vanguard mutual funds to fidelity who then sold them and reinvested in a portfolio that meets your risk preference. Easy to do and no problems giving donations to charities through Fidelity.

[stan1]

Thanks everybody. The stock would be coming from a Schwab account. Not sure if this makes it worth going with them or not, I assume I can transfer it to any of the funds perhaps with more paperwork...

If your taxable investing account is at Schwab I would use Schwab Charitable for simpler and more convenient contributions. If something does go wrong you are working only within the Schwab family rather than any finger pointing between Schwab and someone else.

As someone else says you can at a later date grant the balance of one DAF to another DAF which effectively executes a transfer.

[RonSwanson]

Thanks everybody. The stock would be coming from a Schwab account. Not sure if this makes it worth going with them or not, I assume I can transfer it to any of the funds perhaps with more paperwork...

If your taxable investing account is at Schwab I would use Schwab Charitable for simpler and more convenient contributions. If something does go wrong you are working only within the Schwab family rather than any finger pointing between Schwab and someone else.

As someone else says you can at a later date grant the balance of one DAF to another DAF which effectively executes a transfer.

Good call, thanks for the advice!

[jebmke]

Thanks everybody. The stock would be coming from a Schwab account. Not sure if this makes it worth going with them or not, I assume I can transfer it to any of the funds perhaps with more paperwork...

If your taxable investing account is at Schwab I would use Schwab Charitable for simpler and more convenient contributions. If something does go wrong you are working only within the Schwab family rather than any finger pointing between Schwab and someone else.

As someone else says you can at a later date grant the balance of one DAF to another DAF which effectively executes a transfer.

That's what I'd do. Schwab and Fidelity are pretty much identical.

[MathIsMyWayr]

I also looked at Fidelity DAF. Their fee is $100 or 0.6% per year, whichever greater. So, your balance should be at least $16,667 to keep the fee at 0.6% if it matters to you.

[Stinky]

Fidelity - lower minimums for giving and donations. We transferred appreciated vanguard mutual funds to fidelity who then sold them and reinvested in a portfolio that meets your risk preference. Easy to do and no problems giving donations to charities through Fidelity.

That’s the reason we’re with Fidelity for DAF.

All of our other accounts are at VG, but Fidelity’s lower minimum grant size on DAF was a compelling factor for us.

[Iorek]

We have Schwab and it’s been great (though I can’t say it is better than the others). Very easy to use from their app.

[mindboggling]

I just opened a DAF at Schwab and intend to roll my Vanguard DAF over to it. One thing I noticed right away is that my Schwab DAF appears with all my other accounts when I log in to Schwab. Vanguard's DAF requires me to go to a separate website with its own login (user/password) to access the account.

[GerryL]

My accounts are with Vanguard. At the time I opened my DAF (2014) I still had a 401k at Fidelity. I went with the Fidelity Charitable DAF for 2 reasons: 1) the lower minimum contributions and grants and 2) the marketing material was much more "accessible," that is, easier to understand.

The Fidelity Charitable DAF uses my old employer-related login credentials, and I find the website easy to use. I fund the DAF using stock held in my Vanguard brokerage account. They say it can take a couple of weeks, but I find that it gets processed much faster. Just a few days last time.

[Swansea]

I hava an account with Schwab and have been very pleased. I get a letter confirming every transaction and contribution.

[Seasonal]

Reportedly, Larry Page (Google co-founder) uses Schwab and Vanguard (and the National Philanthropic Trust).

[sycamore]

I just opened a DAF at Schwab and intend to roll my Vanguard DAF over to it. One thing I noticed right away is that my Schwab DAF appears with all my other accounts when I log in to Schwab. Vanguard's DAF requires me to go to a separate website with its own login (user/password) to access the account.

Can you roll one DAF to another? I thought that once you contribute to a DAF, the money is not yours anymore - it belongs to the DAF and you of course still have the right to recommend a grant. A DAF isn't like an IRA where you can rollover/transfer the funds to a different custodian.

Or are you saying you'll recommend a grant from your Vanguard DAF account to go to your Schwab DAF account?

[BuddyJet]

Thanks everybody. The stock would be coming from a Schwab account. Not sure if this makes it worth going with them or not, I assume I can transfer it to any of the funds perhaps with more paperwork...

If your taxable investing account is at Schwab I would use Schwab Charitable for simpler and more convenient contributions. If something does go wrong you are working only within the Schwab family rather than any finger pointing between Schwab and someone else.

As someone else says you can at a later date grant the balance of one DAF to another DAF which effectively executes a transfer.

Good call, thanks for the advice!

Moving a DAF from one broker to another isn’t as easy as a regular account. From a DAF article

Notably, while a donor-advised fund can facilitate the transfer to another donor-advised fund (in essence, as a grant from one to another), not all donor-advised funds cooperate with outbound transfers to other DAFs (as the donor-advised fund is not required to acquiesce to the donor in all situations). As a result, if there is any concern that an initial donor-advised fund provider may not be the right fit for the long run, it is advisable to ask up front if the donor-advised fund permits transfers to other DAF providers.

https://www.kitces.com/blog/rules-strat ... le-giving/

I’d suggest setting the DAF at the place you want it to be for the long haul, particularly since we are not close to year end where timing could be important.

I am happy with my DAF at Fidelity.

My advice is to keep good records of the basis of donated stocks. The basis info does not follow the stocks when donated and can be hard to get after the fact. Particularly if you donate individual lots and not all of a stock. You will need the basis for your tax return and the deduction could be disallowed without it.

[sycamore]

...
Moving a DAF from one broker to another isn’t as easy as a regular account. From a DAF article

Notably, while a donor-advised fund can facilitate the transfer to another donor-advised fund (in essence, as a grant from one to another), not all donor-advised funds cooperate with outbound transfers to other DAFs (as the donor-advised fund is not required to acquiesce to the donor in all situations). As a result, if there is any concern that an initial donor-advised fund provider may not be the right fit for the long run, it is advisable to ask up front if the donor-advised fund permits transfers to other DAF providers.

https://www.kitces.com/blog/rules-strat ... le-giving/

I’d suggest setting the DAF at the place you want it to be for the long haul, particularly since we are not close to year end where timing could be important.

I am happy with my DAF at Fidelity.

My advice is to keep good records of the basis of donated stocks. The basis info does not follow the stocks when donated and can be hard to get after the fact. Particularly if you donate individual lots and not all of a stock. You will need the basis for your tax return and the deduction could be disallowed without it.

Thanks for sharing the above. I wasn't aware you could effectively transfer from one DAF to another.

[mindboggling]

I just opened a DAF at Schwab and intend to roll my Vanguard DAF over to it. One thing I noticed right away is that my Schwab DAF appears with all my other accounts when I log in to Schwab. Vanguard's DAF requires me to go to a separate website with its own login (user/password) to access the account.

Can you roll one DAF to another? I thought that once you contribute to a DAF, the money is not yours anymore - it belongs to the DAF and you of course still have the right to recommend a grant. A DAF isn't like an IRA where you can rollover/transfer the funds to a different custodian.

Or are you saying you'll recommend a grant from your Vanguard DAF account to go to your Schwab DAF account?

Perhaps roll-over is not the proper term. Yes, you do it by granting the full amount in the Vanguard DAF to the Schwab DAF. Vanguard sells everything and sends the funds to Schwab's DAF, which I opened without funding. The funds have not yet shown up at Schwab, but my Vanguard DAF is empty & closed. I'll know in a day or so if the transfer went smoothly.

[FIREchief]

Thanks everybody. The stock would be coming from a Schwab account. Not sure if this makes it worth going with them or not, I assume I can transfer it to any of the funds perhaps with more paperwork...

If your taxable investing account is at Schwab I would use Schwab Charitable for simpler and more convenient contributions. If something does go wrong you are working only within the Schwab family rather than any finger pointing between Schwab and someone else.

As someone else says you can at a later date grant the balance of one DAF to another DAF which effectively executes a transfer.

Good call, thanks for the advice!

Moving a DAF from one broker to another isn’t as easy as a regular account. From a DAF article

Notably, while a donor-advised fund can facilitate the transfer to another donor-advised fund (in essence, as a grant from one to another), not all donor-advised funds cooperate with outbound transfers to other DAFs (as the donor-advised fund is not required to acquiesce to the donor in all situations). As a result, if there is any concern that an initial donor-advised fund provider may not be the right fit for the long run, it is advisable to ask up front if the donor-advised fund permits transfers to other DAF providers.

https://www.kitces.com/blog/rules-strat ... le-giving/

I’d suggest setting the DAF at the place you want it to be for the long haul, particularly since we are not close to year end where timing could be important.

I am happy with my DAF at Fidelity.

My advice is to keep good records of the basis of donated stocks. The basis info does not follow the stocks when donated and can be hard to get after the fact. Particularly if you donate individual lots and not all of a stock. You will need the basis for your tax return and the deduction could be disallowed without it.

Why do you think you need the basis for donated shares? Are you talking about short term shares?

[BuddyJet]

...........

My advice is to keep good records of the basis of donated stocks. The basis info does not follow the stocks when donated and can be hard to get after the fact. Particularly if you donate individual lots and not all of a stock. You will need the basis for your tax return and the deduction could be disallowed without it.

Why do you think you need the basis for donated shares? Are you talking about short term shares?

I made a sizable DAF in 2019 and my accountant said that the IRS has started looking at large donations and disallowing if the basis isn’t included on the form. Short or long term doesn’t matter.

This sounded odd to me but I saw this on a google search.

https://www.pgdc.com/pgdc/dc-court-appe ... duction-fa

[FIREchief]

Why do you think you need the basis for donated shares? Are you talking about short term shares?

I made a sizable DAF in 2019 and my accountant said that the IRS has started looking at large donations and disallowing if the basis isn’t included on the form. Short or long term doesn’t matter.

This sounded odd to me but I saw this on a google search.

https://www.pgdc.com/pgdc/dc-court-appe ... duction-fa

Thanks. That’s weird.

[BuddyJet]

I made a sizable DAF in 2019 and my accountant said that the IRS has started looking at large donations and disallowing if the basis isn’t included on the form. Short or long term doesn’t matter.

This sounded odd to me but I saw this on a google search.

https://www.pgdc.com/pgdc/dc-court-appe ... duction-fa

Thanks. That’s weird.

Yep. It’s easy to get the needed basis info as part of the donation process but hard after the fact. My donation was made through the Fidelity selection tool but it took my broker working with the back office on other systems to get basis for the various lots. I couldn’t get the info from the client facing site.

[FIREchief]

I made a sizable DAF in 2019 and my accountant said that the IRS has started looking at large donations and disallowing if the basis isn’t included on the form. Short or long term doesn’t matter.

The IRS 8283 instructions state the following:

Column (g). Do not complete this column for publicly
traded securities held more than 12 months, unless you
elect to limit your deduction cost basis.

https://www.irs.gov/pub/irs-pdf/i8283.pdf

It sounds like they want you to keep basis records, but not enter anything on form 8283 for long term shares of publicly traded securities.

They do go on to say:

See section 170(b)(1)(C)(iii). Keep records on cost or other basis.

From the article, it sounds like the IRS was concerned that a charitable deduction of $33M was claimed for property acquired a year earlier for $3M. I can see that!

ETA: the 2017 IRS instructions for 8283 read:

Column (g). Do not complete this column for property held at least 12 months or publicly traded securities. Keep records on cost or other basis.

So, there was a change where they went from leaving the basis column blank for all property held at least 12 months to just leaving it blank for publicly traded securities.