Giving is an act of trust and hope. With Endowment and Donor-Advised Funds, Catholics across the Diocese of Phoenix can support the Church today and far into the future while staying rooted in prayerful stewardship. This guide compares these two powerful tools—how each works, where each shines, and how they can include your children and grandchildren in a lasting, faith-filled legacy.
Quick definitions
A Donor-Advised Fund (DAF) is a flexible charitable account: You make a tax-deductible contribution and then recommend grants to Catholic (and other eligible) charities over time, with the option to involve family members as successor advisors. An Endowment is a fund established to last; the principal is invested for growth, and a set portion is distributed annually according to a spending policy, supporting the designated parish, school, scholarship, or ministry in perpetuity.
Shared heart, different strengths: Both tools serve the Catholic mission and can be aligned with your values; they simply operate on other timelines and levels of flexibility.
How each can fulfill your legacy
When a Donor-Advised Fund is a great fit
A DAF is ideal when you want foundation-like giving without the complexities of running a private foundation (for example, separate filings, stringent rules, forced payout rates, and ongoing administrative costs). It’s also the right choice if you value flexibility to respond to needs, such as a parish capital campaign, a new school program, or emergency relief, and wish to support multiple ministries over time. Finally, a DAF makes mentoring the next generation in charitable discernment easy by naming children and grandchildren as successor advisors who can carry your giving forward.
When an Endowment is a great fit
An endowment is best when you want to permanently sustain one or more ministries with predictable annual support governed by a spending policy. It suits those who prefer a “set it and sustain it” approach that endures beyond market cycles and individual grant decisions. It allows you to name the fund, such as a family or memorial scholarship, so your witness to the faith continues perpetually.
You want to permanently sustain one or more ministries with predictable annual support driven by a spending policy.
You prefer a “set it and sustain it” approach that endures beyond market cycles and individual grant decisions.
You wish to name the fund (e.g., a family or memorial scholarship) so your witness to the faith continues perpetually.
Together, they can be powerful: Many Catholic families open a DAF for flexible giving now and pair it with an endowment (funded now or through their estate) for forever support.
Involving future generations
Your generosity is a living catechesis. Create a giving rhythm, using your DAF for Advent and Lent grant cycles, then invite family to research ministries, pray, and recommend grants together. Name successor advisors so children and grandchildren can continue recommending grants from your DAF for decades. For your endowment, write a clear purpose statement that expresses the Catholic ministries or scholarships it should support so that the intent stays faithful long after you’re gone. Finally, celebrate the annual impact by reviewing your endowment’s yearly distributions with your family and parish leaders and make it a tradition.
Tax and administration (high level)
DAFs and endowments receive charitable contributions that may offer tax benefits under current law—consult your professional advisor. Compared with private foundations, DAFs avoid separate foundation tax filings and certain IRS complexities and do not carry the same mandatory payout requirements. Endowments follow a prudent, board‑approved spending policy that balances today’s ministry needs with tomorrow’s, helping your gift provide “until the end of time.”
The Catholic Community Foundation can coordinate with your advisors to ensure your plan reflects your intentions, Catholic values, and the needs of ministries in the Diocese of Phoenix.
Which is right for my legacy?
Ask yourself three things: Do I want flexibility or predictability? If flexibility matters most, start with a DAF; if perpetual, steady support is the priority, consider an endowment. How do I want my family involved? If you envision ongoing, hands‑on grantmaking with your children and grandchildren, a DAF is ideal, while an endowment can complement this with a named, permanent impact. Do I prefer “now,” “forever,” or both? Many donors choose both—using a DAF for responsive giving now and establishing an endowment (now or via their estate) to bless ministries for generations.
Next steps with the Catholic Community Foundation
Ready to design a legacy that’s faithful and enduring? Contact the Catholic Community Foundation to discuss Endowment and Donor-Advised Funds and set up successor advisors for multi‑generational giving, establish or name an endowment for your parish, school, scholarship, or ministry, and coordinate with your tax and legal advisors to align your plan with Catholic values and your intentions. Let’s begin your plan today.