DAF FAQs—Your Top Questions Answered
At NPT UK, we strive to make charitable giving a straightforward and rewarding experience. We do this by providing donor-advised funds (DAFs) to donors in the UK, or those around the world who wish to base their philanthropy in the UK.
A DAF is a philanthropic fund set up under an umbrella charity (like NPT UK) that administers the fund on behalf of the donor. DAFs have become the UK’s fastest-growing philanthropic vehicles owing to their simplicity, efficiency and immediate benefits.
While they are increasingly being used as an alternative to setting up a charitable trust or foundation, there are still plenty of benefits that may be unknown to your clients.
Here are ten of our most frequently asked questions about DAFs and how they can be used.
Who can open a donor-advised fund account?
Individuals, families, companies, foundations and other entities can all start a donor-advised fund account by contributing assets.
How quickly can my client establish a donor-advised fund account?
At NPT UK, it usually takes less than 48 hours. Once your client submits a completed Donor Application and passport copy for KYC purposes, their DAF account can be established quickly, ready to receive contributions.
What types of assets can be contributed?
Your client can contribute a wide range of assets to a DAF. This includes cash, publicly traded shares, restricted and controlled stock, privately held stock, alternative investments such as private equity interests, property, art and bequests.
Can my client’s children be involved with the donor-advised fund?
Yes. Your client can name them as an advisor or successor advisor to their account. They can legally assume these roles once they turn 18. If the Successor Advisor is a minor, NPT UK may require that a legal guardian make grant and investment recommendations on the child’s behalf.
What tax benefits will my client receive when contributing to a DAF?
Benefits may include Gift Aid for UK clients, additional claims for higher rate taxpayers and income tax relief for gifts of shares. If your client pays tax in the U.S. and UK, NPT Transatlantic provides a tax-effective dual-qualified DAF.
For more information on all the tax benefits visit our Tax Advantages page.
Can my client choose to be public or remain anonymous with a DAF?
Your client can name the DAF what they wish, and talk about it publicly. Equally, a DAF allows your client to make grants anonymously if they so choose.
Can contributions be made offshore?
Yes. NPT UK accepts contributions to a DAF made offshore, meaning that your clients can use offshore trusts and other fiduciary structures to make contributions to a DAF.
What happens to a contribution after it is accepted by NPT UK?
Your client may recommend that their DAF assets are invested before they are granted out. For higher value DAFs with NPT UK, your client may recommend the investment manager of their choice.
Can my client recommend a grant from their donor-advised fund account to any charity or non-profit organisation?
Your client may recommend grants to qualified charitable organisations around the world at any time. NPT UK conducts the necessary legal and operational due diligence to make the grant.
How many grants can my client recommend in a year?
There is no limit to the number of grants a donor can recommend in a year.
With NPT UK’s support, a DAF could help your clients achieve their philanthropic goals in the most efficient and effective way.
NPT UK does not provide legal or tax advice. This blog post is for informational purposes only and is not intended to be, and shall not be relied upon as, legal or tax advice. The applicability of information contained here may vary depending on individual circumstances.