6 minute read
Key Takeaways
- DAFs offer immediate tax deductions, investment growth, and flexible giving — all in one tool.
- Advisors retain investment control when using the Dunham Donor Advised Fund.
- DAFs open doors to deeper conversations, intergenerational planning, and practice differentiation.
The Giving Revolution Advisors Can't Ignore
In today’s wealth management world, the most powerful financial conversations aren’t always about stocks, taxes, or retirement. Sometimes, they start with a simple question:
“What’s the best way to give back?”
Well, donor advised funds (DAFs) are fast becoming the answer.
For advisors, they’re not just another charitable tool. No - they’re a bridge to deeper relationships, smarter tax moves, and lasting loyalty.
If you’ve ever had a client ask about meaningful giving - or how to make a difference without making a mess of their taxes - keep reading.
What Is a Donor Advised Fund?
A donor advised fund is a charitable investment account run through a sponsoring organization (such as a financial firm or nonprofit).
When clients contribute assets - cash, stocks, crypto, even complex assets like real estate - those assets grow tax-free inside the DAF. Clients can then recommend grants to qualified charities whenever they choose.
Think of it as a charitable giving account with compound benefits:
- Immediate tax deduction
- Tax-free growth
- Grant flexibility over time
- Legacy planning and family involvement
Here’s the big picture: Clients really have only three places to leave their money: family, charity, or the government. Your job as an advisor is to disinherit the IRS. A DAF lets them direct more to the causes they care about, instead of letting the IRS decide.
Why Financial Advisors Should Pay Attention to Donor Advised Funds
Many clients and investors want impact with intention. They’re looking for ways to align wealth with values - and DAFs deliver.
For example:
- Simplified giving and tax reporting - One large DAF contribution replaces dozens of separate donation receipts, with grants made any time during the year.
- Eliminating Capital Gains - Contributing appreciated assets to a DAF eliminates the capital gains tax and allows a deduction for the full market value, subject to the IRA gifting rules.
- Deepening client relationships - A DAF opens doors to conversations on legacy planning, charitable strategy, and multi-generational giving.
The Dunham Donor Advised Fund: Tailored for Advisors Like You
Not all DAFs are created equal. The Dunham Donor Advised Fund (Dunham DAF) is designed specifically for advisors who want to stay ahead of their clients’ charitable plans.
Figure 1: Dunham, 2025
Key Features of the Dunham DAF:
- You retain the investment management role.
- Clients get real-time access to grant history, balances, and gifting tools.
- Seamless integration into client reviews and retirement income strategies.
Unlike many custodians or foundations that may restrict advisor input, Dunham’s DAF lets you guide the strategy and the giving.
Smart Advisor Use Cases for DAFs
Let’s make this real with examples advisors can use:
- Pre-Retirement Tax Planning - A client with highly appreciated assets can donate those assets to a DAF, eliminating capital gains tax while also using the resulting deduction to offset the tax impact of a Roth conversion.
- Business Sale or Windfall - Selling a business triggers a major tax event. A DAF contribution may take some of the edge off of the tax bill and can turn it into a decade-long giving plan.
- Legacy Planning with Kids - Involve children or grandchildren in annual grant decisions. It builds values, strengthens family bonds, and positions you as the go-to generational advisor.
Final Thoughts: Doing Well by Doing Good
In an industry that’s evolving fast, purpose and planning are colliding. Donor advised funds sit at that intersection.
For financial advisors, they’re not just another tool - they’re a way to amplify impact, build deeper trust, and future-proof your business.
So, next time a client asks, “What’s the smartest way to give?” - you’ll have the answer.
Let’s Talk
Want help positioning donor advised funds in your practice?
Talk with our Dunham Business Development Team and get custom DAF collateral, marketing templates, and training for client conversations.
Call us at (858) 964-0500 or email us today.
FAQ: Donor Advised Funds for Financial Advisors
Q: Can clients contribute non-cash assets to a DAF?
Yes - including stocks, real estate, privately held business interests, and more.
Q: What’s the minimum contribution to open a Dunham Donor-Advised Fund?
The minimum is $50,000. Accounts opened below that amount are subject to an annual $65 small account fee.
Q: Can clients name successors or involve their children?
Absolutely. Clients can name a successor donor to take over grant recommendations when they are no longer capable of doing this, or set up custom family giving plans.
Q: Do advisors lose the assets under management?
Not with Dunham. You stay in control of portfolio allocation and remain the client’s investment advisor.
Q: What if a client isn’t ready to grant funds yet?
No problem - clients can donate the assets now, get the deduction, and give later. It’s a giving “pause button” with tax free growth potential.
Disclosures:
This communication is general in nature and provided for educational and informational purposes only. It should not be considered or relied upon as legal, tax or investment advice or an investment recommendation, or as a substitute for legal or tax counsel. Any investment products or services named herein are for illustrative purposes only and should not be considered an offer to buy or sell, or an investment recommendation for, any specific security, strategy or investment product or service. Always consult a qualified professional or your own independent financial professional for personalized advice or investment recommendations tailored to your specific goals, individual situation, and risk tolerance.
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
A donor advised fund (“DAF”) is a separately identified account that is maintained and operated by a section 501(c)(3) organization and is not a registered investment company.
The Dunham DAF is powered by University Impact (“UI”), a registered 501(c)(3) nonprofit in the United States who manages the charitable aspects of the Dunham DAF.
UI charges fees to the Dunham DAF for administrative services in accordance with the Fee Schedule as outlined in Appendix A of the UI Donor Advised Fund Agreement (“Agreement”). Accounts are required to maintain a $1,000 minimum balance and are subject to support investment fees as explained in the Agreement. A list of current fees and initial gift minimums is available upon request. UI reserves the right to change its fee or minimum policies at any time. There may be additional fees charged by the Financial Advisor that are separate from UI’s administrative and impact investment fees.
Contributions to the Dunham DAF are irrevocable contributions made to UI, a public charity.
Assets contributed to the Dunham DAF (once liquidated, if applicable) will be invested in the Dunham Asset Allocation Program sponsored by Dunham & Associates Investment Counsel, Inc., a Registered Investment Adviser and Broker/ Dealer. Member FINRA/ SIPC. Dunham Trust Company and Dunham & Associates Investment Counsel, Inc. are affiliated entities.
All financial decisions and investments involve risk, including possible loss of principal. The market value of the Dunham Donor Advised Fund is not guaranteed by UI and may fluctuate depending upon investment results. Investors should carefully consider a fund’s investment goals, risks, sales charges and expenses before investing. The prospectus contains this and other information. Please read the prospectus carefully before investing or sending money.
Investment allocations may be changed according to Dunham’s standard policies and procedures. UI may hold up to 5% of the Dunham DAF assets in non-interest bearing cash at any time.
As the Program Sponsor, Dunham charges each donor a single service program fee (“Program Fee”) not exceeding 0.25%.
In addition, a Financial Advisor may charge a client/donor an asset-based advisory fee (“Advisory Fee”) as specified in the Advisory Agreement. Detailed advisory and expense fee information about the Dunham Asset Allocation Program is available in the Wrap Fee Program Brochure available upon request.
As investment adviser to the Dunham Funds, Dunham receives the investment advisory compensation described in the Dunham Funds’ prospectuses and such fees are borne by all shareholders in the Dunham Funds, including the donor.
Dunham & Associates Investment Counsel, Inc. is a Registered Investment Adviser and Broker/Dealer. Member FINRA / SIPC. Advisory services and securities offered through Dunham & Associates Investment Counsel, Inc. Trust services offered through Dunham Trust Company, an affiliated Nevada Trust Company.