When developing a charitable giving strategy, it’s important to consider not just what you give, but when and how you give. For many individuals and families, a donor-advised fund (DAF) can offer a flexible and tax-efficient way to align charitable intentions with broader financial planning.

KEY TAKEAWAYS

A DAF allows you to take a tax deduction now while deciding later how to distribute your gifts
Contributions can be invested and grow tax-free, potentially increasing your long-term impact
A DAF provides flexibility to manage the timing, size, and structure of your charitable giving

A More Flexible Approach to Giving

One of the advantages of a DAF is its ability to separate your tax strategy from your charitable giving strategy.

When you contribute to a DAF, you receive an immediate tax deduction in the year the gift is made. At the same time, you retain the ability to recommend grants to charities over time—whether immediately or years later. This flexibility can be especially valuable when financial decisions and charitable intentions don’t naturally align on the same timeline.

Here are three scenarios that illustrate how this approach can work in practice.

Scenario 1: Aligning Giving with Tax Planning

Our client was advised by her accountant that she needs to make a $25,000 gift to charity to offset some of her income for the current year, but she hasn't decided on a designated charity.

In years of elevated income—such as from a bonus, business sale, or other liquidity event—a DAF can serve as a strategic tool.

Rather than rushing to identify charitable recipients before year-end, this client can contribute to a DAF to capture the tax benefit now, then thoughtfully determine how and when to distribute those funds. This approach allows for more deliberate giving while still optimizing her current-year tax strategy.

Scenario 2: Supporting Thoughtful and Intentional Giving

Our client needs a sizable charitable deduction this year but doesn't feel comfortable donating a large sum to a single charity all at once.

A DAF can help structure giving in ways that reflect the client’s preferences and priorities:

Distribute over time: Make grants gradually to support organizations in a sustainable way
Maintain privacy: Avoid drawing attention to large one-time gifts
Support multiple causes: Allocate funds across charities as your interests evolve

This approach can be particularly helpful for those who want to remain engaged in their giving over time rather than making one-time decisions.

Scenario 3: Enhancing Long-Term Impact

Our client would like to accumulate her annual charitable gifts over multiple years to make a single, more impactful gift.

Because assets within a DAF can be invested, the client’s charitable contribution has the potential to grow tax-free before being distributed. This creates an opportunity to increase the overall impact of her giving—whether she chooses to support charities annually or accumulate assets for a larger, future gift.

A Strategic Role in Financial Planning

For many individuals, a donor-advised fund is not just a charitable tool—it is a planning tool.

By separating tax decisions from charitable timing, a DAF can help bring greater flexibility, intentionality, and efficiency to your giving strategy. When integrated thoughtfully into your broader financial plan, it can support both your philanthropic goals and your long-term financial objectives.

If you’re considering how charitable giving fits into your broader financial plan—or how a donor-advised fund may support your goals—your Janney Financial Advisor can help you take a more thoughtful, coordinated approach.

Working With Janney

Depending on your financial needs and personal preferences, you may opt to engage in a brokerage relationship, an advisory relationship or a combination of both. Each time you open an account, we will make recommendations on which type of relationship is in your best interest based on the information you provide when you complete or update your client profile.

If you engage in a brokerage relationship, you will buy and sell securities on a transaction basis and pay a commission for these services. Our recommendations for the purchase and sale of securities will be based on what is in your best interest and reflect reasonably available alternatives at that time.

If you engage in an advisory relationship, you will pay an asset-based fee, which encompasses, among other things, a defined investment strategy, ongoing monitoring, and performance reporting. Your Financial Advisor will serve in a fiduciary capacity for your advisory relationships.

For more information about Janney, please see Janney’s Relationship Summary (Form CRS) on www.janney.com/crs which details all material facts about the scope and terms of our relationship with you and any potential conflicts of interest.

By establishing a relationship with a Janney Financial Advisor, we can build a tailored financial plan and make recommendations about solutions that are aligned with your best interest and unique needs, goals, and preferences.

Janney Montgomery Scott LLC, its affiliates, and its employees are not in the business of providing tax, regulatory, accounting, or legal advice. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any taxpayer for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.

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