For philanthropists looking to formalize their giving, the process begins with choosing between establishing a donor advised fund (DAF) or a private foundation. While both provide structure, our network of advisors tell us that their clients are increasingly understanding that DAFs—especially when housed within a community foundation—are the most strategic way to maximize your resources for creating impact.Â
If you’ve never thought of your giving as strategic, consider that just like financial or estate planning, being intentional with your philanthropy can help you achieve your goals more effectively.
It starts with simplicity
The many logistical advantages of DAFs over private foundations are well documented:
- Lower start-up and ongoing costs
- Faster setup
- Reduced administrative burden
- Anonymity, if preferred
With a DAF you’re free from backend responsibilities like legal, compliance, tax receipting and auditing, leaving you more time to focus on what inspires your giving.
But that's just the beginning. While DAFs are easier in general, those at a community foundation also make your giving go farther.
Beyond efficiency: Four advantages of a DAF at Toronto Foundation
1. Access to world-class investment management
With over $800M in assets, our investment pool—managed by the globally renowned firm, RockCreek Canada—delivers strong returns (14.6% in 2024) and responsible investment strategies. That means more to grant, and a portfolio that’s aligned with your values.
2. Plugged into local nonprofits, networks and knowledge
A $500,000 donation to your alma mater is meaningful. But allocating a part of your gift to a local education nonprofit could help dozens of students imagine a different future.
Through resources like our Good to Give Guide, Toronto’s Vital Signs research, and curated events, we connect you with high-impact, often underfunded organizations doing critical work to help you build your giving portfolio.
With a private foundation, or other DAF providers, finding these opportunities falls to you. With us, you gain access to community expertise and networks from day one.
3. Support for family foundations and legacy planning
Families start foundations with hopes of bringing loved ones together, but that’s often easier said than done. We facilitate conversations to help families build legacies that reflect shared values.
Or if the next generation can’t take over the family’s private foundation—due to relocation, differing priorities, or costs—we can help you convert your foundation to a DAF and create succession plans that ensure your legacy continues with purpose.
4. Flexibility that adapts to the different stages of life
As life evolves, DAFs allow you to change your philanthropic focus without rewriting your will.
Or, in moments like a business sale or when experiencing a liquidity moment, a DAF lets you secure tax benefits in the same year while giving you time to plan your giving strategy.
A DAF can also offer greater flexibility for estate tax planning. For example, shares of a holding company can be donated to a DAF, whereas this is typically restricted with private foundations.
Can private foundations still be a strategic option?
In some cases, yes, and it’s always best to check-in with your advisor when weighing options and we're here to answer any questions. But many of our fundholders achieve similar goals through their donor advised funds: running scholarships, launching granting programs and supporting complex initiatives, all while relying on us for backend support or as fiduciary partners. Â
Perhaps most telling, is our network of dozens of professional advisors who have chosen to open their own DAFs with us.Â
Conclusion: A smarter way to give
In short, DAFs offer all the benefits without all the work. If your philanthropic goal is meaningful, lasting impact, a donor advised fund—especially at a community foundation—is one of the most effective strategies available.
To explore whether a DAF at Toronto Foundation is right for you, contact Aneil Gokhale for a conversation.Â