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Donor Advised Funds, or DAFs, are an increasingly common giving method for households even of moderate wealth. By setting up a DAF, a donor is able to give appreciated stock or other assets to the fund, then direct grants from that fund to organizations they would like to support. (They can also give cash to the fund, using it to consolidate and organize their giving.)
The financial institution or community fund that manages the DAF handles the work of receiving and selling the appreciated asset. For the donor, this means that they do not pay taxes on the appreciation of the asset and they get tax deductibility for the full value of the asset, resulting in a double benefit (and more money to charity). For organizations it means less headache dealing with donations of stock.
It is important to note that the donor has made their donation to the DAF. Legally speaking, once the asset has been given to the DAF, it is no longer owned by the donor and, therefore, that is the moment of tax deductibility. On their taxes, donors will claim credit for the value of the donation to the DAF, regardless of how much money goes out from the DAF in grants that year. The subsequent grants from the DAF to organizations (including Clean Air Council) are technically from an organization (the DAF), not an individual. For this reason, DAF money that comes in to CAC is going to be soft credited to the donor(s). And acknowledgment of gifts from DAFs should be a thank you, but not a tax letter.
Properly recording the DAF donation in Salesforce, therefore, requires a bit more data entry than a direct individual donation:
1. We need an account to represent the DAF itself. The record type should be Foundation and the Type should be Donor Advised Fund. You can either create a freestanding organization account or you may want to make a child account of the financial institution that hosts the DAF. It may be helpful to include the name of the financial institution in the DAF name, such as "The Tree Brother Fund of the Philadelphia Foundation," particularly if you are not going to put DAFs as children to the financial institution account.
2. Take this time to create Affiliations for the fund donors. When creating the affiliation record, you can choose the Related Opportunity Contact Role that will be assigned to that person for donations by this account. In this case, choose Donor Advised Fund.
3. Go to the account page for the DAF and create a new donation. (Technically this is a grant, but it's easier to use a Donation in cases where you do not work the gift through a formal application process. If there are family foundations or donor advised funds that actually require a formal grant process, use the Grant opportunity record type.)
4. Look at the opportunity that was just created. If you had donors with affiliiations, they will automatically have gotten contact roles as chosen in step 2. If you put a primary contact on the opportunity, that person will have been automatically assigned the Soft Credit role. Make any necessary edits to opportunity contact roles to give soft credit to all the right people. (There is automation that will give Soft Credit to other members of the primary contact's household.)
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