As you shift into retirement, you may feel a strong desire to give back to the causes you care about. While one-time charitable gifts can be a meaningful way to support your favorite organizations, they may come with limitations in terms of tax benefits and flexibility.

Many Californians are considering donor-advised funds (DAFs) as a way to make a lasting impact on the causes they wish to support while also benefiting from retirement tax benefits.

At Bulman Wealth Group, we bring decades of experience in providing comprehensive wealth management services, including estate and retirement planning in California, tailored to the needs of our clients.

In this article, we’ll look at DAFs, how they can be used in legacy planning, and important factors to consider when including them in your wealth planning strategy.

What Are Donor-Advised Funds (DAFs)?

DAFs are charitable giving vehicles that enable you to establish a fund and receive an immediate tax deduction for your contributions. While this approach can offer you several retirement tax benefits, it’s wise to consult a financial advisor in California to understand the specific tax advantages available to you.

Beyond tax benefits, DAFs provide flexible giving options, allowing you to recommend grants to various charities over time. Also, they have the potential to create a lasting impact. The assets in your fund have the potential to keep growing, allowing charities to receive support even after you pass, ensuring the causes you care about continue to benefit. This makes DAFs an excellent choice for retirees looking to leave a meaningful legacy.

How DAFs Can Be Used for Long-Term Impact

DAFs can be used to support a wide range of causes in California, including:

• Education: Scholarships for underprivileged students, support for educational institutions, and funding for innovative teaching methods.
• Environment: Conservation efforts, clean energy initiatives, and programs to protect natural resources.
• Arts and culture: Supporting local museums, theaters, and arts organizations.
• Medical research: Funding for specific diseases, healthcare access programs, and medical research institutions.
• Long-term care facilities: Improving care for elderly residents and enhancing the quality of life in long-term care settings.

By recommending grants to various charities over time, you can strategically allocate your resources to address evolving needs and maximize your impact.

Additional DAF Considerations for Californians

When establishing a donor-advised fund, it’s important to consider the following factors.

Minimum contribution requirements: Different DAF providers may have varying minimum initial contributions. These requirements can range from a few thousand dollars to significantly higher amounts. Research different options to find a provider that aligns with your budget and giving capacity.

Investment options: DAFs typically offer a variety of investment options, allowing you to customize your portfolio according to your risk tolerance and growth objectives. Evaluate the available investment choices, their performance history, and how well they match your charitable goals. A well-chosen investment strategy can help your philanthropic contributions grow over time, creating a sustainable source of funding.

Fees: Different DAF providers charge various fees, including setup fees, annual maintenance fees, and transaction fees. It’s important to thoroughly understand the fee structures of different providers and compare costs. Keep in mind how these fees will impact your overall giving and potential investment returns.

By carefully considering these aspects, you can make informed decisions and establish a DAF that supports your philanthropic goals and financial situation.

Working With a Financial Advisor in California

A skilled financial advisor like those with Bulman Wealth can play a valuable role in helping you leverage DAFs in California for charitable purposes. We can help you:

• Develop a charitable giving strategy: We’ll assist you in creating a personalized plan that aligns with your philanthropic interests and financial objectives.
• Assess your suitability: Our advisors will determine if a DAF is the right charitable giving vehicle for your financial situation and goals.
• Select the right DAF provider: We’ll evaluate different providers based on factors such as fees, investment options, and grant-making flexibility.
• Manage your DAF: Our financial advisors will provide you with ongoing advice on investment decisions, grant-making recommendations, and tax implications.
• Address compliance requirements: We can assist you in making sure your DAF complies with relevant state and federal guidelines.

At Bulman Wealth, we operate as fiduciaries, which means we hold a legal and ethical obligation to act in the best interests of our clients. This requires us to prioritize your financial goals and well-being above our own. As fiduciary financial advisors in California, we are committed to providing unbiased guidance and helping you build financial confidence as a California resident.

How Bulman Wealth Can Help

Donor-advised funds can turn one-time gifts into a sustainable source of charitable support, providing tax advantages, flexibility, and the potential for long-term growth. Our team at Bulman Wealth can help you navigate the complexities and nuances of this charitable giving tool. As experienced financial advisors in California, we understand the unique challenges and opportunities that come with living and giving in the Golden State.

We believe in building long-term relationships with our clients, which means taking the time to understand your values, goals, and priorities. By getting to know you on a deeper level, we can help you make informed decisions about philanthropy and maximize the impact of your charitable giving.

In addition to providing guidance on DAFs, our team offers comprehensive wealth management services tailored to your specific needs. From investment strategies to retirement planning and tax optimization to long-term care planning in California, we are dedicated to helping you pursue your dream retirement. 
To learn more about how a donor-advised fund can help you with your charitable giving goals, schedule a free consultation with a financial advisor at Bulman Wealth Group today.