Your clients now have an opportunity to use donated funds to support for-profit ventures established to achieve sustained positive change in issues of social and environmental concern. At LOHAS, donor-advised funds (“DAFs”) are retooled to be impact investment vehicles, allowing individuals and families to become their own impact venture capitalists.
UNLOCKING THE INVESTMENT POTENTIAL OF DONOR-ADVISED FUNDS
Unlike most DAF sponsors that limit donors to making grants to nonprofits, or the handful of DAF sponsors that permit donors to do impact investing with their DAFs but restrict those activities with investment minimums or a pre-determined list of approved recipients, LOHAS has unlocked the world of DAF impact investing by encouraging corporate donors to invest in what makes the most sense for them, structured as desired, and in the amounts they deem appropriate to achieve their strategic social and environmental impact goals.
DAF ADVANTAGES TO FINANCIAL ADVISORS
- Financial advisors can attract new clients by offering DAFs while also helping with retention of existing clients and increasing assets under management.
- Financial advisors can guide their clients to donate greatly appreciated assets they’ve held over time to a DAF and receive the fair market value for the donation, eliminating the need to determine the exact cost basis of the assets, which would be difficult to determine if the assets were sold.
- A financial advisor’s older clients can establish DAFs for their entire families or create separate DAFs for their children, which allows the advisor to meet and work with the children before their parents pass on.
- If a financial advisor’s client is about to sell their business (or some other illiquid asset), the advisor can help them donate some of the privately held stock into a DAF before the sale to reduce the capital gains taxes versus if the stock was donated after the sale.
- Because most estate planning attorneys and accountants now recommend DAFs instead of private foundations, financial advisors that inform their clients’ other advisors that they can support DAF accounts prevents the other advisors from suggesting a DAF sponsor that doesn’t allow the financial advisor’s involvement.
- Financial advisors who set up client DAFs make their own operations much more efficient, especially during the peak of the charitable giving season, by having clients donate stock to one DAF account instead of numerous charities and reducing the workload by needing to keep track of only one tax receipt.
- Perhaps most importantly, by using a LOHAS DAF, financial advisors with clients that have expressed an interest in impact investing can use the DAF for making those investments, satisfying the client demand while eliminating the risk of investing funds into social enterprises from the client’s investment portfolio managed by the financial advisor.
IS A LOHAS DONOR-ADVISED FUND A GOOD FIT FOR YOUR CLIENTS?
Q: Do your clients want just to “set and forget” their DAF and leave it in passive investments laid out by the DAF sponsor?
A: Then, No, a LOHAS DAF is not for them. Fidelity, Schwab, or Vanguard may be better fits.
Q: Are your clients’ social and environmental impact interests limited to a single charity?
A: Then, No, use the DAF of their preferred nonprofit and allow all of their donations to flow to that specific charity.
Q: Do your clients recognize the power of social enterprise to change the world, and do they want to use donated capital to orchestrate that change by investing their DAF funds in impactful companies, funds, projects, and productions of their choice?
A: Then, Yes, a LOHAS DAF is for them.
Q: Have your clients wanted to do more impact investing? Are you or they uncertain about how and where to invest? Are you or they interested in risk-free donated capital as a way to test the impact investment waters?
A: Then, Yes, a LOHAS DAF is for them.
Q: Do you foresee your clients donating not only cash to their DAF but potentially also cryptocurrency or other non-fiat currencies, real estate, stocks, bonds, privately held business interests, collectible art, or anything with an appraisable value?
A: Then, Yes, a LOHAS DAF is for them.
Q: Do your clients already have Donor-Advised Funds (but want the impact investing handcuffs removed)?
A: LET US SHOW YOU HOW TO TRANSFER THEIR DAF FUNDS.
Q: Interested in opening a Donor-Advised Fund and allowing your clients to become their own impact venture capitalists?
A: LET’S GET YOUR DAF SET UP TODAY.
HOW DOES LOHAS HELP?
The LOHAS team of professionals provide:
- Hands-on support setting up or transferring your DAF
- Guidance in establishing your impact investing strategy
- Deal sourcing and analysis to satisfy investment goals
- Ongoing performance reporting and investment support
- Fees paid only from DAF funds
LOHAS actively advises donors about impact investing and helps enable investment strategies that are designed to make a measurable and sustainable difference. LOHAS supports INDIVIDUALS AND FAMILIES as well as CORPORATIONS and financial advisors.
For families that want to introduce their youngest generations to impact stewardship, LOHAS can also help your clients utilize their DAFs for INVESTMENT EDUCATION ONBOARDING.
LOHAS DAF ADVANTAGES
Whether your client is looking to become their own impact venture capitalist or you’re helping a family to create a lasting legacy, a LOHAS donor-advised fund has many advantages:
- An immediate tax deduction within the year the contribution is made
- No distribution minimums, fewer tax and reporting requirements, and a greater degree of privacy than is available through a corporate foundation
- The ability to invest your DAF funds into the socially or environmentally impactful companies, funds, projects, or productions they select
- A way to use risk-free donated capital to explore the world of impact investing
Ready to explore impact investment opportunities or looking for support as you craft your client’s DAF-enabled impact investing strategy? LET US HELP!
