When Should Your Family Office Clients Set Up a DAF?

Author Natalie Pinon, Director of Development

October 25, 2021

Whether they are multi-jurisdictional or in the UK, many of your family office clients may be engaged in charitable giving. While one family office may have a family business as a principal asset, another may be managing significant wealth spread across jurisdictions and generations. Just as every family office is unique, so is their philanthropy. Here’s when a donor-advised fund (DAF) might be the right structure for giving back and making a difference. 

Moving from ad-hoc giving to more long-term giving: There comes a point when donors want to move from reactive charitable donations to more sustained giving. Setting up a DAF allows family offices to set aside philanthropic capital and invest it if they wish. They can then grant to charities at any time. 

Using a DAF for impact investing: DAFs are uniquely positioned to help your family office clients use sustainable and impact investing to amplify their giving. Your clients can recommend their DAF assets to be invested in ESG indexes or cause-specific investments, thereby having a positive impact before they’ve recommended their first grant.   

Engaging the next generation: Many family offices use charitable giving to engage the next generation in the responsibility of wealth. A DAF offers a flexible solution that can allow the next generation to develop their own giving strategy. Advisory privileges on a DAF can also be passed on through generations.

Having a DAF alongside other charitable structures: Some family offices may already have charitable structures in place focused on specific causes or regions. They may also use a UK-based DAF to complement their giving, build a philanthropic endowment and/or make contributions offshore.   

Whether they want to fulfill their responsibility to advance social change, educate the next generation to build a lasting legacy, or simply make the most of the tax advantages associated with charitable giving, your family office clients need an efficient charitable structure to manage their giving. To find out more about how DAFs can help, contact us.    

 

Natalie Pinon is Director of Development at NPT UK. She has over 15 years of experience working with philanthropists and impact investors to manage their giving.

 

 

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.