Comments
I've looked a bit at DAFs but the fees look quite high and I wonder if I could assemble something better myself.
By "quite high," do you mean 0.6% per annum in addition to the mutual-fund expense ratio? That's the fee charged by Vanguard, Fidelity, and Charles Schwab on the first $500k. To me, the benefits a DAF offers seem worth the price:
- immediate tax-deductibility
- untaxed dividends and interest
- ease of granting (you don't have to coordinate with the recipient to transfer appreciated assets)
- pre-commitment (the money must go to a 501(c)(3) charity)
For people looking to invest millions of dollars, 0.6% would seem excessive. But larger accounts have lower fees. Here the fees for Vanguard's "Select" accounts:
| First $500K | 0.60% |
| Next $500K | 0.30% |
| Next $29M | 0.13% |
| Next $70M | 0.05% |
So a $100m account would cost $77,200 in DAF fees, plus the mutual-fund fee. That seems like a steal to me (although high-rollers might prefer something with more-flexible investment options).
The main reason I can think of not to use a DAF is that you think that there's a high chance you'll want to do something with the money other than donate it to a 501(c)(3).
Assuming you're in the US: How about a Vanguard Brokerage account and a Google spreadsheet?
In a Vanguard Brokerage account, you can invest in something like Total World Stock Market. Then to donate from the account, you could do any of the following:
You should also tax loss harvest as needed.
And then you can keep track of your contributions, donations, and other details you want to keep track of in a Google spreadsheet.