Give with greater impact

Gifts to a donor-advised fund can now be invested in sustainable investment strategies that potentially grow your contributions with ESG in mind.

 

A donor-advised fund (DAF) can be a convenient, flexible, tax-advantaged way of giving that offers your contributions, because they are invested, the opportunity to potentially grow over time. These benefits have made DAFs the fastest-growing philanthropic vehicle during the past five years.1 Now added to that list is the ability for your contributions to be invested in sustainable investing portfolios. “Sustainable investments allow donors to magnify the impact of their charitable giving — aligning their values and charitable priorities to both their grant and asset management strategies,” explains Donald J. Greene, national philanthropic relationship executive, Bank of America Private Bank.

 

To that end, seven portfolios with sustainable investment strategies, including Environmental, Social and Governance (ESG) factors, are now included in the Bank of America Charitable Gift Fund. “Our sustainable portfolios help donors stay true to their social values regardless of the investment objective they’ve selected to support their charitable giving strategy with the Bank of America Charitable Gift Fund,” says Greene. You can make gifts directly through the online portal to any of the more than 1.7 million IRS-recognized charities in the Bank of America Charitable Gift Fund.

4 reasons to consider putting DAF contributions in sustainable investing portfolios #1 Popularity The number of individual DAF accounts has quadrupled over the last five years, making them the fastest-growing vehicle in philanthropy. #2 Performance Over the past decade, sustainable investment funds have outperformed traditional stock funds. 81.3% Percentage of US Large Cap Equity ESG funds that outperformed their non-ESG peers over the past decade. #3 Adoption One out of every three investment dollars now goes toward ESG/sustainable funds. o2018: $5.4 billion o 2019: $21.4 billion o2020: $51.1 billion #4 Tax Efficiency DAFs have higher tax deduction thresholds for cash donations than private foundations. DAF deduction limits:4 o Cash contributions — up to 60% of adjusted gross income (AGI) o Securities and appreciable assets — up to 30% of AGI Private foundation deduction limits:5 o Cash contributions — up to 30% of AGI o Securities and appreciable assets — up to 20% of AGI
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1 National Philanthropic Trust, 2020 Donor-Advised Fund Report, 2020.

 

2 Morningstar, Distribution of 10-Year Annualized Excess Return for Surviving Sustainable U.S.Large-Cap Blend Funds, June 2020.

 

3 Morningstar, Flows for U.S. Sustainable Funds Again Reach New Heights, January 2021.

 

4 American Endowment Foundation, 5 Primary Tax Benefits to Donors, as of June 2021.

 

5 Hurwit & Associates, Starting a Private Foundation, as of June 2021.

 

Important Disclosures

 

Investing involves risk, including the possible loss of principal. Past performance is no guarantee of future results.

 

Bank of America, Merrill, their affiliates, and advisors do not provide legal, tax, or accounting advice. Clients should consult their legal and/or tax advisors before making any financial decisions.

 

Impact investing and/or Environmental, Social and Governance (ESG) managers may take into consideration factors beyond traditional financial information to select securities, which could result in relative investment performance deviating from other strategies or broad market benchmarks, depending on whether such sectors or investments are in or out of favor in the market. Further, ESG strategies may rely on certain values based criteria to eliminate exposures found in similar strategies or broad market benchmarks, which could also result in relative investment performance deviating.

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