How a Donor-Advised Fund Can Help Make a Difference (In More Ways Than One)

A donor-advised fund (DAF) is a charitable investment account that provides simple, flexible, and efficient ways to manage charitable giving. A sponsoring charity will act as the administrator of the DAF to ensure compliance, perform due diligence, and issue grants requested by the donor. The donor receives an immediate tax deduction on contributions and can recommend grants from the fund over time. Anyone can open a donor-advised fund; we have a DAF called the Ranch Cap Blessings Fund. I discovered a unique story behind how the fund started when I recently interviewed Ranch Cap's President Gregg Pacitti CFP®.

When Gregg moved to Lakewood Ranch in 2001, one of his very first clients was a woman named Ann. Gregg shares, “She was married to her husband Jim, who passed away just a couple of years after we began working together. Jim and Ann did not have children. We grew very close over the years, and she was a great client and friend until she passed away in 2019.”

Gregg explains, “Like many clients, Ann had a charitable giving objective as part of her financial goals, and we discussed setting up a donor-advised fund to help meet that objective. She had a large holding in one particular bank stock that appreciated quite well over the years. She decided to gift a portion of the stock shares into her newly formed DAF, which avoided paying capital gains taxes and provided a charitable deduction to help lower her tax obligations for that year. The shares of the bank stock were sold within the fund and reallocated into various diversified investments. She could deposit more into her fund at any time and control the timing of any charitable grants she wanted to distribute. Staying fully invested, the donor-advised fund also doubled in size over the years even with periodic distributions.”

Before Ann passed away in 2019, she named Gregg as the successor donor advisor, which allows someone to carry on the charitable intentions of the fund and make recommendations for grants to charities after the death of the primary donor. Gregg said, “Surprised and honored that she chose me for this duty, I humbly accepted the role. I wanted to build on Ann's legacy and her kindness the best I could, which meant growing the fund and using it to make a difference.” Since then, Ranch Cap has been donating a percentage of our revenue to the fund each quarter. The entire RC team has rallied together to support various charitable causes. We even renamed the donor fund the RC Blessings Fund to remind ourselves of the importance of sharing one's blessing with those in need.

We wanted to share the story of how this special fund came to fruition and why it means so much to us. We continue to focus our efforts on growing our ministry so that we can impact more non-profit groups and local charities. If you are contemplating opening your own donor-advised fund and have questions, we are happy to help. Please get in touch with our office for more information.

Mother Teresa said, “It’s not how much we give, but how much love we put into giving.”