By Meg Lokey, Vice President of Philanthropy, Pinellas Community Foundation
For many clients, charitable giving is personal. They may want to support causes they care about, involve their family in giving, reduce tax exposure, or create a lasting legacy in the community. But while the desire to give may be clear, the best strategy for doing so is not always obvious.
That is where donor-advised funds can become a powerful planning tool.
For CPAs, estate attorneys, wealth advisors, and financial planners, donor-advised funds offer a flexible, tax-efficient, and easy-to-manage way to help clients organize their charitable giving. They can simplify the giving process, support broader financial planning goals, and help clients make a meaningful impact without the administrative burden of starting and managing a private foundation.
What Is a Donor-Advised Fund?
A donor-advised fund, often called a DAF, can be thought of as a charitable giving account. A client contributes assets into the fund, receives the applicable charitable tax deduction, and then recommends grants from the fund to qualified nonprofit organizations over time.
Instead of writing multiple checks to different charities throughout the year and keeping track of every receipt, the client can make one or more contributions into their donor-advised fund. From there, they can support the organizations, causes, and communities that matter most to them.
This makes DAFs especially useful for clients who give regularly, want to be more intentional with their philanthropy, or need a more organized structure for charitable planning.
Why Advisors Should Consider DAFs for Charitable Clients
For advisors, donor-advised funds can open the door to better planning conversations.
If a client has charitable intent, a DAF can help connect that intent to their larger financial, tax, and estate plan. It can be especially valuable when a client is experiencing a liquidity event, selling a business, managing highly appreciated securities, or looking for ways to involve the next generation in giving.
Rather than treating charitable giving as something separate from financial planning, a donor-advised fund allows giving to become part of the strategy.
For example, clients may be able to contribute appreciated assets, such as publicly traded securities, real estate, or certain closely held business interests, instead of giving cash. When structured properly and completed before a sale or other triggering event, this may help reduce capital gains exposure while supporting a charitable deduction subject to applicable IRS rules and limitations. For clients with concentrated positions or low-basis assets, this can be a meaningful planning opportunity.
It is also why timing matters. When a client is preparing to sell a business or liquidate a major asset, charitable planning should happen before the transaction, not after. Advisors who bring donor-advised funds into the conversation early may help clients create a more efficient and impactful giving strategy.
DAFs Can Be Simpler Than Private Foundations
Some clients assume that creating a family foundation means forming a separate nonprofit organization or private foundation. While private foundations can be appropriate in certain situations, they also come with administrative responsibilities, tax filings, required distributions, board management, compliance oversight, and public reporting.
A donor-advised fund can offer some of the family, legacy, and grantmaking benefits clients associate with private foundations, but with far less administrative complexity.
Clients can name their fund in a way that reflects their family, values, or legacy. They can involve children or other family members in grantmaking decisions. They can recommend grants to the qualified nonprofits they care about. They can even name successor advisors to continue the family’s giving after their lifetime.
For many families, a DAF provides the feeling and structure of a family foundation without the administrative burden.
Privacy, Flexibility, and Donor Intent
Another important benefit of donor-advised funds is flexibility.
In many cases, clients can recommend whether grants are acknowledged publicly, in the name of their fund, or anonymously. Some donors want recognition and an ongoing relationship with the nonprofit. Others prefer to give quietly. A DAF can support either preference.
DAFs can also adapt over time. A client may begin with annual giving, then later incorporate estate gifts, successor advisors, or new charitable priorities. They may contribute in one year for tax planning purposes but distribute grants over several years. This can be helpful for clients who want to “bunch” charitable giving into a particular tax year while still supporting nonprofits at their normal annual pace.
A donor-advised fund can also provide flexibility during moments of urgent community need. If a client has charitable assets already set aside in a DAF, they can respond quickly to disasters, local crises, or emerging nonprofit needs without changing their tax position.
A community foundation can also help document charitable goals, successor advisor preferences, and grantmaking priorities so future recommendations remain connected to the donor’s original intent.
The Added Value of a Local Community Foundation
While donor-advised funds are available through many institutions, working with a local community foundation can add another layer of value.
Pinellas Community Foundation brings local knowledge, nonprofit relationships, and community insight to the giving process. For clients who care about making an impact in Pinellas County, this local expertise can be especially helpful.
PCF can help donors identify organizations aligned with their goals, research nonprofits, evaluate giving opportunities, and understand where charitable dollars may make the greatest difference. This is valuable not only for donors who already know what they want to support, but also for clients who are new to the area, newly focused on philanthropy, or unsure where to begin.
PCF also helps with due diligence and compliance, giving donors and advisors confidence that charitable grants are being made appropriately and in alignment with the donor’s intent.
DAF vs. Private Foundation at a Glance
| Planning Issue | Donor-Advised Fund | Private Foundation |
| Setup | Established through a sponsoring charity | Separate legal entity |
| Administration | Managed by sponsoring organization | Board, filings, compliance, administration |
| Grantmaking | Donor recommends grants | Foundation controls grants directly |
| Privacy | Grants may often be anonymous | Public reporting generally required |
| Family involvement | Successor advisors/family grant discussions possible | Formal family governance possible |
| Best fit | Simpler, flexible charitable planning | Larger, more formal philanthropic structure |
A Strategic Opportunity for Advisors
For CPAs, estate attorneys, wealth advisors, and financial planners, donor-advised funds are more than a charitable giving tool. In the right circumstances, they can become an important part of a client’s broader charitable, tax, and estate planning strategy.
They can help clients simplify giving, reduce administrative stress, maximize tax efficiency, involve family members, preserve privacy, and create long-term impact. They also allow advisors to support clients beyond the numbers, helping them think through how they give, what they support, and the legacy they want to create.
When charitable giving is part of the conversation, a donor-advised fund may be one of the most practical and powerful tools to consider.
If you are working with a client who wants to give more intentionally, donate appreciated assets, involve family members, or plan ahead for a business or asset sale, I would be happy to serve as a resource. Bring me into the conversation early, and we can explore whether a donor-advised fund may fit the client’s goals.
About Meg Lokey
Born and raised in Pinellas County, Meg Lokey brings more than two decades of fundraising and donor engagement experience to her role as Vice President of Philanthropy at PCF.
Meg Lokey works with donors, families, and professional advisors to help align charitable giving with personal values, planning goals, and community impact through Pinellas Community Foundation.
