After crystallizing your philanthropic intentions and strategy, determine which vehicle is best suited to carry out your vision. (See the linked article for reflection questions to help with this process.) Your determined philanthropic priorities could prompt the creation of a new giving platform for yourself, or simply entail integrating mission-driven activities into your existing investment practices. Some of the most popular options—often used in combination—are noted below.

Personal contributions or outright gifts to organizations are the most straightforward approaches to giving. Known as checkbook philanthropy, this approach is easy to execute but may not be sufficient for individuals who want more engagement with the organizations that they support.

By housing charitable assets in a donor advised fund (DAF), philanthropists receive immediate tax benefits and can choose to disburse resources to nonprofit beneficiaries at a later date. DAF sponsors assume all reporting and compliance requirements on behalf of their clients. Since these organizations report all financial activities in aggregate, DAF users are able to make contributions anonymously, if desired.

Donors contributing a large amount upfront might establish a private foundation, and this endowment can be managed either in perpetuity or for a set period of time. Grant making from a private foundation is similar to offering a charitable gift, but with grants, the beneficiary is required to comply with terms set by the foundation and outlined in a grant agreement.

Limited Liability Companies (LLC) can serve as hybrid entities hosting both for-profit and charitable activities, allowing philanthropists to simultaneously pursue financial and social returns. This vehicle affords philanthropists maximum flexibility since it can manage under one umbrella grant making, advocacy and lobbying, impact investing, and even traditional commercial investments. Depending on your philanthropic goals and the problems you are trying to solve, you may want/need to utilize all of these tools. Since an LLC is considered a type of for-profit entity, capital channeled to this entity is not tax deductible, which sets it apart from DAFs and private foundations.

For individuals who have a family office (which are often structured as LLCs), philanthropy can be incorporated into that operation. Given financial capital’s versatility in philanthropy, a family office can execute an array of philanthropic directives, including direct contributions, grant making, advocacy, and impact investing, among other activities.

A philanthropic vehicle must serve your philanthropic interests, and since it can present some upfront costs to set up, consider all your options before making a selection. Consulting a legal professional could be especially valuable for this endeavor.

Additional Resources

• Review CSP’s detailed Field Guide articles about engaging in philanthropy via a private foundation, donor advised fund, LLC, or family office.

• Answer seven questions and the WiserGiving Wizard offers a recommendation for the philanthropic vehicle that best aligns with your charitable, financial, and personal goals.

• This vehicle comparison chart and corresponding worksheet from the National Center for Family Philanthropy provide guidance on a variety of philanthropic structures and their key functions.

• The Walton Personal Philanthropy Group conducted research on how families and founders can integrate their philanthropy and impact work into existing or new structures.