Fred and Wilma learn about DAF's

Thanks to Dr. Mike Richie, for his clever message about the value of having a Donor Advised Fund (DAF). If you need to reduce your tax burden or have a desire to create a charitable fund for your future donations - learn more about it like Fred and Wilma!

Mike Richie - Faribault Foundation Board Member

“Oh, not again,” moans Fred as Dino barrels through the front door, happily leaping on his master and knocking him flat on his back.

“Dino, down boy, down! Wilma! Can you grab him a bone so I can get up?” he yells.

With the dinosaur now distracted and gnawing on a treat, Fred plops wearily into a kitchen chair—shoulders slumped, long face on full display. Ever perceptive, Wilma sits across from him.

“You look like you’re carrying the weight of the quarry on your shoulders, Fred. Talk to me.”

“I’m that obvious?” Fred sighs, as Wilma simply raises an eyebrow.

“Well,” he continues, “with the sale of Slate Rock and Gravel, Mr. Slate is giving us old-timers a big bonus this year. A thank-you for sticking with him.”

“And that makes you sad... how?” asks Wilma, eyebrow climbing higher.

“Oh, it doesn’t! It’s generous—and we’re all grateful. But today we had a ‘lunch and learn’ with a speaker from the Bedrock Community Foundation about reducing the tax impact. I just feel... overwhelmed.” He slides the stone tablets of information across the table.

“Let’s eat dinner,” Wilma says, reaching for a bottle of Cactus Cola. “Then I’ll take a look through this and we can figure it out together.”

Later, as Fred dries the dishes and Wilma reviews the rock-slab documents, her eyes widen.

“This is amazing, Fred. How did we not know about this years ago?”

“As usual, Wilma, I need you to explain it to me.”

“Okay,” she begins, “if we itemize our taxes, charitable giving is deductible. Let’s say—with your bonus—we’re in a 35% federal bracket and a 10% Bedrock state bracket. That’s a total of 45%. For easier math, call it 40%.”

“That means if we donate $50,000, we reduce our taxes by $20,000. So the real out-of-pocket cost of the gift is just $30,000. It’s like the government is matching 40 cents on the dollar.”

“But we’re still giving $50,000 away, right?” asks Fred.

“Correct. But we save $20,000 in taxes—so it’s like the IRS is sending $20,000 to our favorite charities on our behalf.”

“We’ve never given that much in one year, though. Who would we give it to?”

“That’s the genius part,” says Wilma. “The Bedrock Foundation offers something called a Donor Advised Fund—a DAF. We make a single donation to the Foundation, and they invest the money. Then we recommend which charities to support, when we want. We get the tax deduction now but can give over time.”

“Now that makes sense,” Fred nods. “But why did Mr. Slate say he’s moving his DAF from some big brokerage firm to the Foundation?”

“Because those firms charge fees,” Wilma explains. “But if your DAF is with the local Foundation, those fees stay in the community and help local causes. So even just moving an existing DAF helps Bedrock.”

“So transferring a DAF helps just as much as starting a new one?”

“Exactly!” Wilma grins. “And it’s easy. Laura at the Foundation handles everything—it just takes a few signatures.”

“Sounds like a win-win to me,” Fred says. “Let’s get it set up.”

“I agree,” says Wilma. “And if Betty and I get our new idea off the ground, we might need a DAF of our own!”

“What’s that idea again?” Fred asks.

“We’re calling it paper, Fred,” she says, tossing the stone tablets into the trash. “It’s going to be huge.”

At the Faribault Foundation, Laura can walk you through everything DAF-related—no stone tablets required. Turns out, Betty and Wilma were right all along.

We urge you to consult your trusted tax professionals and financial advisors for tax advice. Contact the Faribault Foundation today to visit about establishing your own Donor Advised Fund. Call 507-805-8800 or email laurabock@faribaultfoundation.org or visit the Faribault Foundation at 530 Wilson Ave Faribault, MN 55021