2. Donor advised funds
A donor advised fund is an alternative to a client having their own (or family) standalone charitable foundation. Instead of registering a charitable foundation with the Charity Commission, they can set up a fund such as a CAF Charitable Trust with a DAF provider.
DAFs offer several advantages over charitable foundations, namely cost savings, tax-efficiency, flexibility, and ease of administrative, fiduciary, and reporting requirements.
Clients can fund a DAF with a variety of assets including cash, shares, non-cash assets and third party entities which the client is connected to. While the gifts are irrevocable and become the assets of the DAF provider, the individual will advise on where they would like the money to go.
Clients can invest the assets in a DAF for the long-term. They can bring in their investment advisor or financial planner to help design an investment strategy that works for their philanthropic plans.
The due diligence to confirm the charitable purpose of grants made by a donor sits with the DAF provider, or their delegated authorities. Once that has been completed, the grant is then made by the DAF on behalf of the client.