DAFs sound great. But I already have or am involved with a private foundation. What can I do?
If you already have a private foundation, there are ways for the private foundation to work with a DAF or even convert to a donor-advised fund (DAF) to take advantage of its flexibility, lower administrative costs, and anonymity options.
The advantages of DAFs over private foundations are significant. They are considerably less expensive and more efficient to operate than private foundations in most instances. And with a DAF there are no ongoing legal and accounting expenses. No ongoing compliance for the donors or their designated fund advisers. All of this leaves more money to be used for charitable purposes and more time for the former private foundation decision makers to focus on thoughtfully finding and supporting the best causes possible!
Most private foundations can be converted into DAFs by creating a DAF and having the foundation transfer its assets to the DAF after arranging for final private foundation tax filings, required notices, etc. If this is something of interest to you, we would be happy to help. Please get in touch and we will evaluate your situation and help you chart the best course forward.
Your private foundation can open its own DAF with Lucia Charitable and fund the new DAF with a grant from itself. This grant from the private foundation into the DAF will count as a charitable distribution from the private foundation for IRS purposes. For example, once your private foundation’s annual giving target is set—often this is the 5% distribution required to avoid negative tax consequences—that amount could simply be distributed from the private foundation to the DAF, thus immediately satisfying the private foundation’s annual giving target for IRS purposes.
Subsequent distributions to specific charitable causes could be made using Lucia Charitable’s easy and user-friendly distribution management infrastructure on any schedule you like, free of pressures to make a certain number of distributions by calendar or fiscal year-end deadline. Lucia Charitable can also work with certain assets like timberland/natural resources that are quality investment assets but whose irregular income yield makes compliance with annual minimum distribution rules burdensome.
Private foundations are required to disclose detailed information about their grants and operations in annual Form 990-PF filings. If you value privacy and anonymity, a DAF can be a great solution. Consider gifting some foundation assets into a DAF that can be used when anonymity is desired. Subsequent gifts can be made from the DAF anonymously.
When Lucia Charitable makes a distribution to a charity from a DAF, it is the choice of your designated DAF advisor how much identification information you would like shared with the receiving charity. If you and your foundation would like to remain completely anonymous, the distribution can be sent solely in the name of Lucia Charitable. If you would like to be made known to the charity, but request no public recognition, that is also possible.
Making charitable giving more strategic, efficient, and impactful
Quick Links
Contact
358 St. Louis Street
Mobile, Alabama 36602
© 2025 All Rights Reserved.
