A Quarter Million in DAFs: A Retirement Goal Achieved

This is not your typical FIRE blog, and I’m not an average FIRE blogger. Financial Independence was never a goal of mine; its presence in my life was a discovery. A few years ago, I learned of the concept, realized I already had enough to retire early, and have been grasping for good reasons not to retire ever since.

I’ve got a good job. I don’t love every aspect of the work I do, but it’s not a job I’ve been desperate to escape from. I know there are a number of things I expect to miss now that I have left my anesthesia career, and I’ve been putting that day off for a while now with a number of tactics that I believe will serve me well in the future.


Delaying Early Retirement


I wasn’t going to retire before my fortieth birthday just because the numbers suggested I could. I figured I would need a few years to figure out if that’s what I really wanted to do with my life. I also had to figure out what I would do next.

Those questions have been answered. I’ve got a list of 50 things I’d like to do with more free time, and I’ll be transitioning to this non-clinical career of a personal finance blogger. Call it semi-retirement or whatever you like. Retired not Retired.

While sorting these things out, I employed three tactics to ensure I’d be work a while longer:

  1. I set a higher goal of Financial Freedom at 36x annual expenses.
  2. I started earning less by transitioning to a part time schedule.
  3. I set a goal to build up our Donor Advised Funds to 10% of our nest egg goal.

My History With Donor Advised Funds


I’ve been donating to a donor advised fund since 2013. It was a year in which I worked as a locum tenens doc with many of my weeks off. I also incurred substantial capital gains when I sold funds to buy a house.

I discovered Bogleheads and realized the funds I owned were suboptimal. Most of them were actively managed, and even the passive index fund I held had an expense ratio of 0.38%. T. Rowe Price, as recommended by Andrew Tobias, wasn’t necessarily a bad choice, but it wasn’t the best, either.

I wanted to jettison more of those mutual funds I was holding in a taxable account, and I found out I could do so by starting a donor advised fund with the T. Rowe Price Program for Charitable Giving. It sounded so sophisticated, and I learned that a sizable donation would keep me out of the top tax bracket and the new 20% capital gains bracket, so I signed on to The Program.

In 2014, I started loading up my taxable account with Vanguard’s passive index funds instead, but I still had some money in the active funds I had purchased years earlier. A review of my 2014 tax documents from T. Rowe Price convinced me that it was time to be done with those.

In early 2015, I opened a new donor advised fund (DAF) with Vanguard Charitable by donating those old T. Rowe Price funds to it. I also gifted the funds held in the T. Rowe Price DAF to the Vanguard DAF to take advantage of the lower fees in the new program.

In the fall of 2015, I logged in to Vanguard Charitable to start making our annual donations. That’s when I became familiar with the $500 minimum grant size that Vanguard has set. At that point, I finally did what I should have done back in 2013 and I researched my options, comparing and contrasting different DAFs.

I learned that both Schwab Charitable and Fidelity Charitable not only have lower minimum donations to open an account ($5,000 versus Vanguard’s $25,000), but they also allow you to give grants of $50 and up, which is a much lower floor than Vanguard’s $500.

So now I have a Fidelity Charitable account for smaller grant giving, a Vanguard Charitable account for larger grants, and an unfunded account with the T. Rowe Price for Charitable Giving.

If I were to open one and only one today, I would choose Fidelity. Schwab appears to be quite similar; I’m just not as familiar with it, and Fidelity’s website is very intuitive and easy to use.


Growing the Donor Advised Funds


To get the maximum number of dollars into a DAF, you want to donate when it costs you the least. That will be when you have income that puts you in the highest tax bracket you ever expect to be in. For me, that was in my final years of clinical work.

In 2016, our DAFs were approaching six figures, and we more than doubled that with a one-time $100,000  donation. I went into detail as to how I chose the mutual funds with the largest percentage gain to make that donation optimally in this post.

I decided to finish funding our DAFs in 2016, knowing that my income put us in the 33% marginal federal income tax bracket and a 9.85% state income tax bracket.

As of 11/20/2016, we were $36,276 shy of the $250,000 goal I set as a prerequisite for early retirement in my investor policy statement.


I've got my 2 acres of non-leveraged, crop-producing, cashflowing farmland via AcreTrader. Get yours.

Donating Vanguard Mutual Funds to Vanguard Charitable


Vanguard Charitable gives you a number of options for contributing to your DAF, including donating assets held at Vanguard, which is what I choose to do.


Vanguard Charitable Contribution
Vanguard Charitable Contribution


As I learned last year, you cannot select particular lots to sell when doing this online, even if you have Specific ID as your chosen cost basis in the taxable account. You can donate specific lots with a phone call or letter of instruction, but the default when donating is FIFO, or in other words, the oldest lots will be donated first.



Vanguard Charitable FIFO


This year, the oldest lots I still held happened to be the lots with the most gains, so I was able to set up the donation in five or ten minutes online.


Vanguard Charitable Lots
Vanguard Charitable Lots


Once you have chosen the funds to donate, you will be presented with all the available investment options. Vanguard Charitable offers five multi-fund options and eight individual fund options. You can invest in a percentage of any or all of these.


Vanguard Charitable Investment Options
Vanguard Charitable Investment Options


I like to keep things simple and can obviously tolerate volatility and loss in hopes of having a higher long-term return. I keep 100% of my DAF money invested aggressively in the 100% stock Total Equity Fund. It consists of 55% S&P 500, 15% extended US market, and 30% total international market, with an expense ratio of 0.07%.

Another click or two, and you’ve got yourself a confirmation.



Vanguard Charitable Confirmation
Vanguard Charitable Confirmation


Note that Vanguard has a minimum of $5,000 for additional contributions to their DAF. With Schwab, it is $500.


Debunking Donor Advised Fund Myths


Any time I see a blog post or forum thread on the subject, I read with great interest. A few comments come up repeatedly as reasons to delay or avoid opening or contributing to a donor advised fund, and I’d like to address them here.


Myth #1: The fees negate the benefits.


It is true that the popular DAFs have similar fees of about 0.6% per year plus the expense ratios of the funds you choose. It’s also true that if you’re in a financial position to open a DAF, you’re presumably choosing between putting money in a DAF or keeping in invested in a taxable brokerage account.

I do my best to invest in a reasonably tax-efficient manner in my taxable account, but it still sees a tax drag of nearly 0.6% per year. I’m not a fan of receiving dividends in a taxable account, and the roughly 2% dividend I do receive is subject to the 15% tax on qualified dividends, the 3.8% NIIT, and a 9.85% state income tax.

In other words, at least for the time being, the fee drag in the DAF is very similar to the tax drag that same money would see in my taxable account.

This will change after retirement when I drop into lower tax brackets, but there are other benefits that make the low fees worthwhile. Among them is the ease of making grants from the DAF and the elimination of a need to keep track and collect receipts from our year-end giving.


Myth #2: The longer you wait to donate, the better the deduction you’ll get.


There is some truth to this, but the math shows it doesn’t really make any difference. For example:

If you give $100 now, and get $45 back on your taxes now, you’ve got $100 in the DAF and $45 to invest in your taxable account.

Years later, when the market has doubled, you have $200 in the DAF and $90 in your taxable account. (Ignoring the 0.6% in tax drag / fees which you would have if you give now or wait to give later).

If you wait all those years to donate until that original $100 in the taxable account has doubled, you will put $200 in the DAF and get $90 back.

So there’s really no benefit to waiting if you plan to give eventually, anyway, unless you plan to be in a higher tax bracket later in life. In that case, you should wait until you’re in the highest bracket you expect to be in to start a donor advised fund. Conversely, if you expect to be in lower tax brackets in the future, there’s no time like the present to fully fund a DAF.

Myth #3: Donor Advised Funds are a Tax Avoidance Scheme


Reading through some of the rationale I used to open and contribute to these DAFs, I can see how one could start to think this way. However, giving a dollar to get 45 cents back is not going to get you ahead financially.

A better way to look at any tax-advantaged giving, whether via a DAF or not, is to look at it as the charity receiving the most money for every dollar you choose to part with.

If you give $100 away without itemizing deductions or using a DAF, the charity receives exactly $100.

If you part with $100 in a tax-advantaged way, the charity receives $180 (assuming a 45% marginal tax bracket). If your marginal tax bracket is much lower at 24% in a no-income tax state, the charity still gets $132 for every $100 you “lose” when you donate.

I’ll be honest — if there weren’t significant tax advantages to donating, I’d be less inclined to be generous. As it is, most days I would rather give my chosen charity a dollar than pay another 45 cents in taxes, and it appears a lot of other people feel the same way as me. As of 2018, there were nearly 463,000 DAF accounts holding over 110 Billion dollars.


Are we Done Donating to Donor Advised Funds?


My goal was to grow our DAFs to a quarter million dollars prior to retiring, and that goal has been met.

However, that doesn’t mean we are completely done giving. I have made a pledge to donate much of my site’s profits to charity, and I’ve now donated about $140,000 since making that pledge. Before the end of 2019, I plan to make another six-figure donation.


Using the 4% rule, I am now comfortable donating at least $10,000 a year from our DAF. We granted about double that in 2018, giving away $10,000 to charities chosen by my readers, and we donated a similar amount to charities chosen by my family and me.

With a $1 Million DAF, we could comfortably give $40,000 a year, and probably more. I’m not saying I expect that to happen, but a man can dream, can’t he?

As time goes on, we’ll probably give in excess of the 4% rule, but if we do end up with money left in the accounts, we have designated our boys as successors to each control half of the remaining funds.


DAF successors
our DAF successors

Bloggers with Donor Advised Funds


I know a number of other bloggers who have established donor advised funds and written about them. If I missed you, please let me know in the comments and I’ll add you to the list.

Bloggers Discussing #actsofkindness


You can give generously with a lot less money or no money at all. There is a chain of blog posts on the topic. Check out what others are doing!



For more information on Donor Advised Funds, see my posts on the topic:



Have you opened or considered funding a Donor Advised Fund? Why or why not?

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73 thoughts on “A Quarter Million in DAFs: A Retirement Goal Achieved”

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  3. Leif,

    Thanks again for all you’ve done to guide us in establishing our DAF at TicTocLife. You’ve been so helpful! Hopefully, when you’ve got time we can be added to the blogger DAF list. 🙂 Thanks!

  4. I hope having a DAF is an inspiration to others to give generously. Though my investments are with VG, My DAF is with Fidelity for the reasons mentioned.

    Thank you for caring and giving.

  5. I have a problem with DAFs because it has a level of risk that has given me hints of entering risk into an ordinarily generous act of kindness. I originally thought of using a DAF to lump my charity for the super year where I group a larger than average year of itemized deductions and subsequent higher return. The DAF does unlink my charitable contributions with a time point as they may sit in the choice mutual funds and grow for an ever larger charitable grant to a 501c3 of my choice. What is the downside? Three risks that may negate the spirit of giving.

    1. The timeline of giving may slow even to the point that the charity may not receive these funds for a longer than usual pattern of time. I normally would have benefitted the charity immediately and now I basically have given them an IUO (“That is good as money sir. Those are IOUs”…Dumb and Dumber) instead of cash. Charities may get more overall in time but they can really use the cashflow each year to keep the services constant.

    2. There is risk of losing money in the short term unless it is put into CD or savings accounts (but why invest is such low returns instead of giving the monies directly to charity). Any investment that decreases or takes years to return any substantial amount might not be worth the risk and at the same time delays any grant to the charity again. In the event that the monies increase in value, there is no additional tax advantage to the donor in that year. Risking donations isn’t my idea of fun or the spirit of giving. I don’t feel better going to a casino in the benefit of a charity especially if the math favors my investment over 10 years. People can use the money in those ten years.

    3. There is also risk of control of the funds once they are in the hands of the sponsor of the DAF accounts.
    “However, one very important concept to keep in mind is that the amounts given to a DAF sponsor become the assets of the sponsor. Contributions into a DAF are irrevocable. Technically, donations directed to a recipient charity by a DAF donor are actually donations made by the DAF sponsor. As such, the responsibility for compliance with IRS charitable donation rules and regulations rests with the DAF sponsoring entity. Part of the fine print in the DAF agreement is that the sponsoring entity has the final authority over the proposed charitable donation.”

    “Many donors might assume that the DAF sponsor’s role is limited to making sure the ultimate recipient organization is really a 501(c)(3) charity. With the national DAF funds (Fidelity, Schwab, etc.) this is most certainly the case. These funds are issue- and geography-blind. However, other DAF sponsors may have other agendas that could get in the way of your charitable gift intentions.”


    • You’ve clearly thought this through. The White Coat Investor isn’t sold on them, either. Thank you for sharing your thoughts.

      I think of my DAF as a charitable foundation rather than a brief stopover mechanism, so it makes sense to invest aggressively to maximize long-term growth. Note that most larger charitable organizations with a positive balance also invest their dollars, and not necessarily in a most conservative way. Look at what University endowments are doing — it’s not in CDs or savings accounts.

      To avoid the risk of #3, simply avoid a small DAF with an agenda. I’ve been very happy with Fidelity and Vanguard (though I prefer Fidelity).


      • Thanks for giving my post consideration. Charity is a part of a lifestyle that we grow as we find ourselves in a position of accumulation of stuff. We do this best in USA and as a result we are some of the most charitable people of the world when it comes to pure money. Let’s be honest, we have and waste a lot of it.

        Thinking back in our life, we see charity in the form of generosities that people have done for us and feel the impact that those acts of kindness affected our day to day wellness. The spirit of charity means a lot to me because I hate doing things out of guilt, shame or worry. I do the best in my life when I do things out of pure kindness, gentleness, and passion (which all line up with love). If you look at the word charity, it is a form of love without requirement of repayment. It is free and a gracious gift that benefits the giver and the recipient immediately.

        Thanks for writing about this topic. Our world certainly needs more care for the poor in spirit.

  6. Great article PoF! My question is I am far from being FI as I’m just figuring things out unfortunately later in the game. Should I still open a DAF? I’m ok maxing out my IRA and 401K, is this my way to lower tax bracket? Thanks in advance

    • Only you can decide if a DAF is right for you. I would start by asking and answering the following questions:

      How much do I give annually now?
      What is my marginal tax rate?
      Will I be itemizing deductions that normally exceed the new increased standard deduction?
      Can I afford to part with this money, knowing I can never get it back?

      A DAF is great for “bunching deductions” if you normally wouldn’t exceed the standard deduction of $24,000 for married filing jointly. WCI and I went over some of the pros and cons in this recent back and forth.

      Hope that helps.


  7. Lastly, I’ll mention again a point I’ve made at WCI. The counterpoint against charity is that it can DAMAGE people more than assisting them. Earning the glow of “what a good girl am I” mandates research and deep digging into consequences and incentives. I live in a broke-ass city and we’ve had these discussions publically.

  8. Congrats on reaching your goal. I use two DAFs; one each at Vanguard and Schwab. I’ll mention a few variances in my thinking from yours.
    I’m planning for the downdraft years in the market by keeping a portion of DAF money in short term treasuries. I don’t want to withdraw during equity bear markets.
    As you promote use of DAFs in the future, highlight the hassle factor. As you know, it is soooo much easier to donate from a DAF than transferring appreciated equities. Small churches will not have anyone on staff to establish a brokerage account. I’ve even experienced two small churches that did not respond to the DAF request to verify 501c3 status, thus foregoing my donation.
    I envision using the DAFs during retirement years prior to RMD years. After that, donations directly from the IRAs and 401ks can be made directly to charities. The direct donations count toward RMDs, and not included in AGI. This may subsequently impact Medicare insurance rates. Hence our DAFs need only last until age 70.5.

    • Those are some excellent points, jz, and your timing is perfect. I’ll be publishing a Pro / Con piece on the benefits of a DAF with WCI in a few short days. I’ll incorporate your ideas. I don’t emphasize how much it simplifies annual giving. It deserves more attention.

      Also, I like your thinking on the RMD issue — I touched on this briefly in a recent post. I don’t plan to have tax-deferred money in 29 years when I hit 70.5, but for those with an RMD “problem,” the direct donation of up to $100K per year makes a lot of sense.


  9. Just catching up on DAFs realizing 2017 is now the optimal year to establish vs our original assumption. Wife and I would’ve likely started a DAF in 2021, the year before we RE, as our tax bracket would solidly be in the 33% + NIIT + State putting us over 40% marginal rate. But with the tax bill looming it seems unlikely we’ll ever hit that marginal rate making this possibly the best time to start it. Have to run the numbers and get it done in the next couple weeks! I plan to go with Fidelity since I started brokerage with them about a year ago (picking up thousands of Delta miles in the process). The cost basis gain may not be huge at this point but still probably decent considering the year’s returns.
    Thanks for your numerous articles on the subject!

    • You are absolutely right. With the pending legislation appearing likely to pass, I would strongly encourage anyone considering a DAF to get it funded before the end of the calendar year. I’ve written more about it for the upcoming Sunday Best post.


  10. Hi, it was your original post on DAF that got me started with a $100k donation. I’m now up to $200k+ and counting. Thanks again!

    I’ve given away about $60k from the DAF already.

  11. Great job, Dr. POF! While I haven’t set up a DAF, I like the benefits and simplicity of it as you explain here. I have so far chosen to give to charity from my own direct earnings/savings keeping a loose track on the %age to this category with respect to our monthly spending/income. If I ever choose to go this route, I will definitely be looking into Vanguard DAF.

  12. I don’t know how to say it without sounding sanctimonious, which is not my intention. But it seems to me you haven’t given away the money. You’ve earmarked it, but given almost none away. You’ve retained control, and by identifying your children as successor donors, you’ve perpetuated family/dynastic control for another generation.

    It’s why I don’t understand identifying a DAF of whatever size as a goal. You didn’t tell me how large your Roth IRA as, or your 401k. With your strategy, the DAF isn’t really different. Except in the eyes of the IRS, you still think of it as your money. You control the investment choices, you plan to sustain it indefinitely with a 4% swr, and you plan to have your children take over any remainder.

    Bottom line, I think you are double counting your generosity and giving less than you could.

    This isn’t meant to be accusatory. I hope you’ll read this with an open mind and heart. I also say this from personal experience. I once accumulated large amounts in my DAF with plans to give it away later. For example in our case we put in $15k per year and gave away $7000. Over time the DAF grew to $50,000. I soon realized this was folly. I wasn’t giving away the money, just moving it from one account to another. And I wasn’t giving away $15k per year, I was giving away $7000. Half as generous as I wanted to be, and could be.

    So we upped our granting to $20k per year. And by next year will have spent down the excess. We still transfer $15k to the DAF each year and next year will up it to $20k to sustain our new level of granting at $20k annually. You’ll also notice that we’ve altered our terminology to reflect reality. Money to a DAF is a transfer, not a gift, contribution, or act of charity. The charity occurs with the grant.

    I see the wisdom of arbitraging your tax rate and lump summing your future giving to the DAF now. But I encourage you to have a finite plan to grant that money over a shorter period of time. And to consider your personal charitable goals as what comes out of your pockets, not what you can grow an amount to over time in a tax protected account.


    • Thank you for the update, John. The line of questioning sounded overly negative without the context of your experience and generosity with donor advised funds.

      I think for me and other early retirees, the arbitrage you mention is key. For me, I also expect to feel some guilt in leaving behind a lucrative career. I don’t need the money, but the money I’m walking away from could be used for the greater good. Building up the DAF to equal about 10% of our retirement assets should help mitigate those feelings.

      With the possibility of tax reform doubling the standard deduction, a lot of families, including mine, will be less likely to itemize in the future. 2017 may be the very best time to load up a donor advised fund. Again, I see it not as maximizing the deduction, but rather giving the most for each net dollar I part with.

      As we both know, the money in the DAF can never be taken back, and I look at it as already given away. I just haven’t decided where all of it is going yet, and I’d like to treat it as more of an endowment than a pool of money to be distributed quickly.

      Over time, if this site continues to grow as it has in its first two years, there is a real possibility that I’ll be adding substantial sums to our DAF annually. If that happens, we will feel comfortable giving more from the fund each year. I also hope my boys will one day be in a position to start charitable giving funds of their own. If they are successful in that regard, I may change our “beneficiaries” to a chosen charity rather than to give them control, but given their ages (7 & 9), that won’t happen for quite some time.

      Thank you for the different perspective and for your generous giving over the years.


  13. Why is it a focus or accomplishment to transfer your money from one account (taxable) to another (DAF)? The spiritual achievement of charitable giving occurs when control is relinquished.

    Based on your prior posts you have a lifetime gross income of maybe 4.5 million. You have contributed say 4% of that to the DAF (the balance consists of growth within the DAF). Are you planning to continue to contribute from your annual income to your DAF or are you planning to fund all or most future charitable donations from the DAF without further contributions? Why is it a goal to establish a DAF of a certain size rather than to contribute a certain amount toward charity? Why accumulate a large DAF balance with relatively small (4% swr) annual contributions? When do you envision transferring the balance of your DAF to traditional charities?

    • Good questions, John. I think I’ve answered some of them in this post and others that I’ve written on DAFs, but I’ll do my best to address them here.

      For the first six or seven years of my career, we donated money directly to charities. It’s only in the last four years that I have had a donor advised fund.

      I am already working part-time and I do not expect to be working (as an anesthesiologist, anyway) in another year or two. I know that these years are likely the last years in which we will be in the upper income tax brackets, so it makes sense to frontload our giving. In essence, it allows us to give more. For every net dollar we donate, a larger amount will be given to charity.

      I discussed above that we may not be done donating. No need to repeat that here. A 4% SWR will allow us to give for many years to come. If we do not suffer a poor sequence of returns, we’ll be in a position to give more generously in later years.

      Why is a sizable DAF a goal? It’s just my goal. It doesn’t have to be yours or anybody else’s. Some have given much more; some will give less. Some choose not to give at all. And that’s OK by me. But if I can inspire others to follow suit, that’s a win in my book. All money given to a DAF will be doled out to charities in due time.


  14. We recently opened a DAF through Fidelity and also have a $250,000 goal before FIRE! Congratulations on being so close to your goal!!

    For us, opening the fund was a great way to jettison some very low-cost basis stock (one of which had a $1 cost basis, but now trades at $138, oof!) while also doing something good. I was really excited when we discovered the structure because we always included giving in our FIRE budget anyway, and the tax efficiency is so great. And I love the idea of creating a legacy of giving by making our boys trustees after our passing.

    • From $1 to $138? If only you could turn back time on that one and buy more, you’d be retired already. I know a guy with a DeLorean if you know a guy with a flux capacitor. 🙂

      Glad to hear you’ve joined the party and have the same lofty goal. Stories like yours counter the assumptions some have that the FIRE crowd is a selfish one.


  15. POF – Thank you for your long series on donor advised funds, its the best writeup I’ve ever seen. Community Foundations have been doing this for a long time, but really failed at marking it to the masses. (I’ve been involved with them locally at 3 different places I’ve lived). Fidelity and Vanguard are only starting to market their availability.

    I agree about the flexibility of the small dollar grants, I’m always asked about coworkers raising money and I feel compelled both in a leadership position and with my capacity to do something, so its nice to be able to send $100 and have the person get a letter. Keep spreading the word about their power!

  16. That 3 weeks in Spain with your family sounds like it was convincing to move forward with full retirement from medicine 🙂

    I’m happy for you. My husband (EM) says he wants to fully retire from clinical medicine by 40. There really is a huge wide world outside of the hospital.

    I’m looking forward to doing extended trips with our family. I’d love to rent an Airbnb for the summer in NYC, Seattle, or DC. I have a social fantasy of starting a FI house swapping group.

    • I like your fantasy, Marilyn — the one about the FI housing swap, that is. I’m definitely interested in exploring current house swapping systems and house sitting opportunities. Seems like a great, frugal way to insert yourselves right into a community.

      Best of luck to you and your husband in reaching your goals. You’ll find the series with E.T.F. (second post out today) of interest. He similarly has a goal to be comfortable FI by about age 40.


      p.s. Although we’re practicing our Spanish on this trip, we’re not actually in Spain. More details to be revealed upon our return to Estados Unidos.

  17. Great post! I love my DAF. One advantage which becomes clear from your story is the ability to ‘clean up’ your spread sheet by donating appreciated stocks or mutual funds that you no longer feel fit into your investing plan. For me, I have some legacy stocks from DRiPs (Dividend Reinvestment Programs) – these were promoted on line in the past and I fell for them. Now I am embarrassed to have them as I prefer index funds to individual stocks. Furthermore, I have to account for the dividends each year on my taxes, and if I were to sell them, not only would I incur the capital gains taxes, but it would be a lot of trouble to determine my cash basis. So I have been donating them over the past couple of years to a DAF – problem solved and I am building up a reservoir for making current and future donations.

    • Good to hear, HiCOLAMD.

      It can feel like you’re “stuck with” some stocks and funds that you purchased long ago, inherited, or were gifted. Selling means incurring capital gains, which as outlined above, is more that 15% for most people, and can be over 35% even for long-term capital gains. Donating them is a good way to move on from those to get your portfolio to look more like something you can be proud of.

      Between donating to the DAF, selling to buy property, and tax loss harvesting, all but one of my lots in taxable were purchased in 2016 or 2017.


  18. Cool to see my name up there, PoF!

    My blog has more or less been scrubbed from Google at this point, but I’m absolutely ok with the legacy of my inactive blog showing up on in this post. Hopefully this list grows the next time I stumble upon it..

    I can’t stress enough how having the DAF allows one to be more charitable during a time of unemployment or underemployment. When I contributed my $17k to the DAF, I want to say somewhere in the neighborhood of $6k came back from the federal and state governments. It would have been have even “more discounted” if I had contributed long term appreciated securities rather than cash. When I saw the tragic natural disaster in Houston, I could send some dough to that community without feeling pain in my budget. That’s the power of the DAF and I highly recommend it to those who can afford it.

    Especially non-physician early retirees because they’re unlikely to be itemizing after they retire.

  19. Thank you for the explanation of DAFs and your fund selection decision process and contribution goals. I have been considering establishing a DAF but haven’t but in enough research effort to make and implement the decision.

    One thing that has held me back is the 100% matching contribution my employer I retired from, IBM, makes when I contribute directly to a charity that qualifies for the match — approved U.S.-based colleges, universities and postsecondary institutions, hospitals, hospices, nursing homes, cultural and environmental institutions that would be 501(c)3s. For example, I annually contribute with a completed IBM matching form to my local PBS station as an education institution and IBM matches my contribution when the PBS station completes its portion of the form and submits it to IBM.

    Do you know or can you or someone direct me to where I can learn whether a DAF will include with donations I specify the IBM matching grant form I prepare so IBM will match my qualified donations from my DAF?

  20. Awesome job! You know how much I think of your efforts here — not only giving but making others aware of it and encouraging the same. If we can get more people to follow along and give, the impact will be so much greater than what we could do alone.

    I use Vanguard since 1) I own VG funds and the transfer process is so, so easy and 2) I can’t imagine wanting to give a DAF gift lower than $500. Anything that low I’d simply give out of cash. (I know, tsk tsk on me.)

    Hope the trip is going well and you all are having a blast!

    • Thank you, ESI$. I know from our discussions and your recent blog post that you’ve been much more generous than me.

      I like to have the ability to give less than $500. For example, when our boys come home with those catalogs of overpriced food or gifts that we’re supposed to sell to neighbors, family, and friends, we refuse to subject people to that. We recycle the catalogs, treat the kids to a treat similar to one they could have earned selling the junk, and donate $50 or $100 each directly to the school from our DAF.


  21. Inspiring post, congrats on coming into your 250k goal!

    A couple other interesting mentions from this post – 1) you hit FI without knowing what it was (a story I knew), but 2) only 4 years ago you were invested in active funds and a high cost index. I just assumed you’d also been a low cost indexer! Which I take both to show that with a high savings rate, success likely comes regardless of perfect financial knowledge. But I’m lucky to have blogs like yours at the beginning of my career instead of 10 years in. So thanks!!

    • Thanks, Charlie.

      I learned enough from Tobias’ book to avoid huge mistakes, but hadn’t discovered the beautiful simplicity of the most inexpensive index funds. I just checked my email archives and found my welcome packet from Vanguard in July of 2013.

      I think resources existed back in 2006 when WCI and I finished residency, but they certainly weren’t as numerous and easy to find.


  22. Really impressive feat. Well done!

    I hope you know that perhaps an equally impressive feat is how this has prompted others to do the same. We started our own DAF at Fidelity based in part from the motivation you (and others who wrote about DAF’s) provided. I am certain there are other folks who are contributing more to charity and that is a huge, huge win.

    Happy Thanksgiving to y’all in the PoF family.

  23. Congrats on the milestone! That is a great acheivement.
    You’ve really got me thinking about this. We have always budgeted a portion for charity each year as part of our financial plan. However, the idea of redirecting more money to chosen charities and away from government (not my favourite charity) now while I am still in the highest tax bracket here is very appealing.
    I also like the opportunity for the heirs apparent to be involved in the tradition of giving as part of their financial education.
    Thanks for the education on my part.

      • After this article, I did look into it. We do have them here at many of the big financial institutions or at the community foundation level. We have an option at MD Management via the Canadian Medical Association, where I keep my portfolio. I am going to look into in preparation for start up in the coming calendar/tax year.

  24. You inspired me to start one also. I funded it yesterday. I chose Vanguard because it was easier to transfer the money into it. I will admit that Fidelity has a slicker website. I don’t know how many of you this will apply to but I am going to do a Roth conversion in a similar amount to achieve this in a less painful way. We all play with the tax code if we can. Tis the season to be charitable.
    Interestingly my brother who is a lawyer had no idea what I was talking about when I mentioned doing this.

    • I am thrilled to hear this, hatton1! Glad Vanguard was able to sort it out.

      Fidelity does have a button to donate securities held at outside institution(s), as does Vanguard. I haven’t used it, but it’s probably easy enough to do.

      I don’t know how widely known DAFs are, but I’m trying to do my small part to raise awareness. They are such a great vehicle for giving for the high-income professional.


      • I just read a Schwab article about the mechanics of DAF. Just to follow up on Hatton1’s comment about leveraging the tax code, the author suggested another winkle. It only makes sense if you want to get some annuity value out of the charitable funds. Basically, donate to charitable remainder trust. Insert here discussion about how to annuitize that trust, and what the immediate tax deduction is. I’m no expert but I gather it is a present value of the expected remainder. Anyway, make the beneficiary of the CRT your DAF. That way you can modify your recipients list as you go. (You can with the CRT as well, but the trust document makes it harder.) Have you heard of this strategy?

  25. You inspire me!
    I have been at this longer. I think I started my DAF in 2003, but my amounts look puny compared to yours. I need to think bigger and give more. You are right also that this is a particularly good year for me to do that. I’m glad you share your story because it will inspire others as well.

    • Inspiration is the reason I write these posts, and a few people reached out last year and told me they started six-figure DAFs of their own, which is very redeeming. Pre-paid donations are a wonderful thing.

      That’s awesome to hear you’ve been using one since 2003 when I was a broke intern / CA-1. Even then, I gave a little bit directly. I remember sending $50 to the Red Cross after a hurricane and feeling really good about it — much better than I felt after blowing $50 on a night on the town.


  26. Thanks for the post! Like yourself, I discovered the concept of FI a few years ago and was about there. Your post last year inspired me to open a DAF and make a significant contribution. We will be doing the same this year given possible tax reform and reduced work hours and income for our family next year and going forward.

    Thanks for spreading all this great information!

    • I remember that, GXA. It’s great to hear from you again.

      I’m happy to hear you’ve got no regrets and plan to continue to build up the fund. It appears that you and I have similar reasons to give this year.

      Enjoy the new and improved schedule. Cheers!

  27. Those DAF successors look so cute ??.

    You’re doing great POF, a quarter million is nothing to joke about. And I look forward to when you’re going to reach the $1M new goal. I think it’s very doable, considering how fast your blog is growing.

    Btw, what are some of your favourite charities?

    • Thank you, Ms99to1.

      I’ve listed some of the places we’ve donated to from our DAF in the charitable mission page. So far, it’s been mostly local charities and disaster relief.

      As I have the ability to give more generously, I’ll be looking at effective altruism and where my donated dollars can have the most impact globally.


      • PoF,
        Can you use your donor funds to send deserving students to college outside of United States instead of a charitable organizations?

        • You can only donate to non-profits registered as 501(c)(3). There are well over a million of them, but you can’t simply give to a person directly. GoFundMe campaigns are similarly not allowed to receive tax-deductible dollars.


  28. I’ve actually written a post comparing Vanguard and Fidelity Charitable, and despite originally wanting to open a Vanguard fund, like you I’ve decided that Fidelity makes more sense. Usually I love all things Vanguard, and while I do believe they have a much better array of low-cost investment choices, they’re very restrictive in the assets they accept and they have a lot of surprise fees. It’s really unfortunate – I hope one day they’ll revise the fund to be more competitive.

  29. Financial Independence was never a goal of mine; its presence in my life was a discovery. A few years ago, I learned of the concept, realized I already had enough to retire early, and have been grasping for good reasons not to retire ever since.

    As you know, we share this in common! Congrats on meeting your DAF goal, that’s awesome. And thanks for the rundown on these as I’m very interested in starting one and was not aware of the differences between Vanguard, Schwab, and Fidelity.

    One thing that concerns me is I’ve read that when it comes time to give from the DAF the administrator (or sponsor) of the fund is not required to give the money where you want. I’ve read they ‘usually’ do, but that if the organization that you wish to give has a mission that runs counter to their philosophy they could refuse. Is this rule consistent with all of them? If so this makes me nervous.

    • Yes! I feel like we cheated. I’ve said it before, but I’m glad I was blissfully unaware of FIRE until I had the FI part secured. I might have hit FI a year or two sooner if it was the ultimate goal, but it might have felt like it took twice as long.

      As far as the DAFs not granting your money, I would not expect that to happen with the large, popular DAFs discussed here as long as you’re choosing a registered 501(c)(3). There would be mutiny.



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