Donor Advised Funds

Do you want to set up your own foundation without the cost and hassle of running it?

Provident offers the perfect solution for you:

A Donor Advised Fund (DAF) is a separately identified account set up through a public foundation operating as a Canadian registered charity. Once the donor makes the receiptable contribution, the foundation has control over it, but the donor, or the donor's representative, retains advisory privileges with respect to the distribution of funds to other charities of their choice.

It's like having your own personal or corporate foundation without the hassle and cost.

Provident offers two types of Donor Advised Funds:

Giving Funds - give now, receive your donation receipt immediately and take some time to decide how your gift should be distributed to your favourite charities.

Legacy Funds - set up a fund now that will receive proceeds / bequests from your Estate. You can leave clear intentions about ministries and charities who will benefit from your fund, or it can be managed by anyone you choose. Distributions to your chosen charities can be made in the short or long term.

Advantages:

  • Easy Set-up: A Provident Donor Advised Fund can be established by the completion of a 4-page form; no legal professionals required.
  • Customization: The donor can name the DAF account whatever they wish; e.g. after a family name, as a memorial to an individual, after an organization, etc.
  • No Start-Up Costs: There are no start-up costs for establishing a DAF, unlike creating a private foundation where legal fees, investments fees and accounting fees are just some of the costs.
  • No Admin Requirements: All administrative, investment and record keeping services are provided by Provident. No additional tax returns or accounting services are required.
  • Confidentiality: A Provident Donor Advised Fund is confidential. The public cannot know how much was given, by whom, or for what purposes.
  • Anonymity: Distributions can be made anonymously through a Provident Donor Advised Fund.
  • Flexibility: The contribution of appreciated securities to a DAF can easily be distributed to several charities.
  • Tax Advantages: A donation receipt will be issued immediately for a gift received, but distributions to charities can be decided upon later, at any time.

Disadvantages:

  • Limited Control: while the advisor to the DAF can advise the foundation of fund distributions, ultimate control remains with Provident and its board of directors, in accordance with charitable law.
  • Annual Fees: while they are minimal compared to a variety of other giving vehicles, the foundation will charge for ongoing maintenance and administration. In a typical year, Provident would expect that the returns on investment will cover the administrative costs, but we cannot guarantee this.
  • Irrevocable Giving: Once a contribution has been made it cannot be returned to the original donor - this is, of course, true with any donation to any charity..

For all the details related to Donor Advised Funds, simply read this document.