Introduction

We're excited to share that Phoenix Hafen, the Director of Advisor Solutions at UI Charitable, recently appeared as a guest on the Agent of Wealth Podcast, hosted by John Williams. 

About the Podcast

Agent of Wealth is produced by Bautis Financial, a wealth management and financial planning firm, and is co-hosted by John Williams. The show covers wealth management and financial planning topics for high-net-worth individuals and families, with this episode focused specifically on how smart charitable giving fits into a broader tax and wealth strategy.

Episode Highlights

In this episode, Phoenix and John discussed:

• Why cash is actually the least tax-efficient asset to donate, and why appreciated assets (stock, crypto, real estate, business interests) let donors "double-dip" — avoiding capital gains tax while still deducting the full fair market value.

• Real examples of unconventional gifts UI Charitable has facilitated — donated greenhouses, a Field of Interest Fund that protects academic-plagiarism whistleblowers from legal risk, and a donor purchasing an abandoned school building through their DAF to convert into a community center.

• How some donors use their DAF for creative, mission-aligned investing, such as one venture investor who has made 20+ investments in emerging fund managers directly out of his charitable account.

Key Takeaways

• A donor-advised fund makes the most sense when you want to separate the tax timing of your gift from the timing of your actual charitable giving, or when the asset you want to give isn't something a charity can easily accept directly.

• A good rule of thumb: if your annual charitable giving is at or above the standard deduction (roughly $32,200 for a married couple filing jointly in 2026), it's worth exploring a DAF and bunching strategy.

• DAFs aren't just a holding account — assets inside can be invested and grown tax-free until you're ready to grant them out.

Why It Matters

This conversation reflects exactly the kind of work UI Charitable does every day: helping donors give the most tax-efficient way possible, whether that's Bitcoin, a business interest, or an odd asset like a set of greenhouses. Improving their charitable planning to optimize their taxes and accomplish their charitable goals.

Listen and Learn More

• Listen to the full episode: https://podcasts.apple.com/us/podcast/donating-more-than-cash-a-guide-to-tax-efficient/id1434738337?i=1000783332589

• Learn more about the Agent of Wealth: https://bautisfinancial.com/agent-of-wealth-podcast/

• Learn more about Bautis Financial: https://bautisfinancial.com/

• Learn more about UI Charitable: https://www.uicharitable.org/

Full Transcript

Welcome back to The Agent of Wealth, this is your co-host John Williams.

Most Bitcoin holders never think about charitable giving because they assume it means selling. Today’s guest is here to change that.

Phoenix Hafen is the Partnerships Manager at UI Charitable, one of the only DAF providers in the country that handles Bitcoin end-to-end without forced liquidation or custody compromise. He has helped deploy over $100 million in philanthropic capital.

Today we are going to discuss what crypto philanthropy actually looks like when done right. 

Phoenix, welcome to the show.

Thank you for having me.

Of course. I’m excited for today’s call because, obviously, Bitcoin’s all the rage right now, and I haven’t had the opportunity to discuss such a cool topic as where crypto fits into philanthropy.

I’m sure a lot of our clients are interested in understanding the tax advantages, because everyone knows they need to pay taxes, but if there are some advantages to working that angle, what those advantages might be.

But before we started, I don’t want to assume everyone even knows the basics. Obviously, there are tax advantages to working with a donor-advised fund, and there are some fundamentals around that subject that I think maybe we could lay down.

So maybe you could give us some background and some information as a place to start.

Yeah, of course. So, UI Charitable, we view ourselves as a philanthropic back office. We work with a handful of high-net-worth individuals and families to help them with their charitable giving.

In doing that, we’re really focused on two main questions: Are our clients achieving the charitable outcomes that they care about? And are they structuring their giving in the most tax-efficient way possible?

Everything we do is informed by those two questions.

Sometimes people scratch their heads at that a little bit, and they say, “Well, philanthropy is really pretty simple. I just give cash to a charity.”

And we say, “No, you should never do that. You should never give cash to charity.”

And that’s not because you shouldn’t be generous or because you shouldn’t be supporting charities, but because cash is the least tax-efficient asset you can give.

And the reason for that is that when you donate cash to a nonprofit, you get a deduction off your adjusted gross income dollar-for-dollar for that cash.

So, if you donate $10,000 to charity, you get $10,000 off your adjusted gross income. And that’s great. That’s a tax benefit.

But it’s the least tax-efficient asset when compared to anything else.

What you really want to be donating is appreciated assets. Whether that’s public securities, a private business interest, real estate, or really anything that has some capital gains liability, those are the assets that you want to be donating to charity.

And the reason for that is that this is one of the rare circumstances where the IRS allows you to double-dip on tax benefits.

So, when you donate an appreciated security—let’s say you have Apple stock, and you bought that Apple stock for $10 and it’s appreciated up to $15.

When you donate that Apple stock, you get a deduction off your AGI for the full fair market value of it, so $15 off your AGI.

But that capital gains appreciation from $10 to $15—you’re not liable for any of that capital gains appreciation once you donate it.

Whether you’re putting this into a charitable giving vehicle, like a donor-advised fund or a private foundation, or you’re just giving that stock directly to a charity, that charity will receive that full $15 of value.

You get a tax deduction for the full $15.

And so you’re getting that double benefit: You’re avoiding the capital gains, and you’re getting a deduction for the full fair market value.

That’s really a big theme. And if there’s one thing you take away from all of this, it’s that you should never donate cash.

Yeah. Well, in the side-by-side comparison, if all you have is cash, then obviously—but what you’re saying is you want to look at your assets and make sure, like, okay, if I am going to give $15 from my net worth, I might as well give it from this asset that has this step-up in basis.

As we know, the value of crypto has gone up quite a bit for some, so there’s probably a lot of advantages for those who actually got in really early.

Thanks for the groundwork there. And I guess the clickbait is the crypto part of it, but it sounds like you guys help people with their tax planning or just planning around philanthropy in general.

So someone will come to you and say, “Hey, we want to start giving.”

Yes. Yeah.

Okay. And do people come to you with Bitcoin specifically first, or is it something like—what’s usually the situation? What does it look like?

Yeah. So Bitcoin was a big theme in kind of late last year when there was that bull run.

We really focus on, when we’re advising people, what are your most highly appreciated assets?

So, if you have really low-cost-basis Bitcoin, that’s a good asset for donation.

If you have a private business that you’ve been building for a long time, that probably has a really low cost basis. And so, if you have a sale coming up or some kind of liquidity event coming up, that’s a really great candidate for donation.

As we’re doing that, we have a couple of different charitable products and services that we offer. Probably 75% of what we do is donor-advised funds.

A donor-advised fund is essentially a charitable giving account. So you take an asset, whether that’s cash, public securities, a business interest, real estate, or really any asset.

And then you put that into the donor-advised fund. You take an immediate charitable tax deduction, and then over time, those assets in that donor-advised fund can grow tax-free.

Then, when you’re ready, you can recommend grants to nonprofits to support the causes that you care about.

So, probably 75% of what we do is focused around donor-advised funds. And the reasoning for that is because it’s just such a great vehicle. It’s super flexible.

The main thing that it’s doing for you is separating the tax consequences of your giving from when you actually accomplish your giving.

The reason that’s productive is that it allows you to optimize for both. You can contribute whatever assets make the most sense for you to donate when they make the most sense for you to donate from a tax perspective.

And then, if you want to rebalance that—so, if you donated a private business into your donor-advised fund and all your charitable capital is now highly appreciated, or highly concentrated, rather—you can sell that off tax-free and put it into a diversified portfolio of public securities.

Now your charitable capital is diversified, it can grow, and you can support the causes that you care about for years to come.

That’s a lot of what we do. We help people set up these charitable vehicles, figure out what makes the most sense for them to donate, determine how they’re going to save the most on taxes, and then, over time, recommend grants to charity and solve the problems that they care about solving.

So what does that look like? Let’s say I have a Bitcoin that I want to sell. What does that look like transactionally?

Yeah. So the process of setting up a donor-advised fund is really easy. It takes really only about 10 minutes. You create an account, and from there, you have the vehicle.

Then it depends on what assets you’re going to donate.

If it’s cash or public securities, that’s really easy. What we do is just open up a brokerage account within your donor-advised fund to hold your cash or your public securities.

With cryptocurrency, we just open up a wallet within your donor-advised fund, and you’re making that transfer.

If it’s some other complex asset, like real estate or a private business interest, anything like that, we handle those donations in-house as well.

The process for those is, first, we’re understanding the gift. We’re understanding what the asset is, how it’s held, whether you hold it directly, whether it’s held in a trust, and so on.

Once we understand the asset, we draft a gift agreement, which is just the legal document that transfers the ownership from you personally into your donor-advised fund.

When you sign that gift agreement, that’s when the gift is made. So the ownership is transferred from you personally into the DAF.

That’s your taxable event, and that’s where you take your charitable deduction from your donation.

You now have your charitable capital set aside. You can invest it the way you want. You can assign an advisor. So, if you’d like your financial advisor to manage those dollars for you, you can do that.

Then, over time, you can support the causes you care about.

If that’s just a grant out to different charities, that’s what we see 90% of the time—grants going to charities. But we also allow for more creative support of nonprofits as well.

We have some individuals who do actual debt impact investments into social enterprises.

What actually makes this a step-up in basis? Is it something that’s done at tax time?

So, if it’s cash or public securities, we can issue you a receipt directly as the nonprofit that’s hosting your donor-advised fund. So that’s really straightforward.

If it’s cryptocurrency—Bitcoin is still viewed by the IRS as property. And so, if you’re doing a donation of over $5,000, you actually need to have that appraised by a qualified third-party appraiser.

There are a few appraisers that we work with that we can refer you to.

But yeah, you get it appraised. And then, with that appraisal, your CPA will fill out IRS Form 8283. That’s the form.

That Form 8283 takes that appraised value. We sign it, the appraiser signs it, and then that’s how you get the deduction off your AGI.

Gotcha. That’s something people are coming to you for—your business. Where does your business fit into that? Are you doing all this for people? People come to you, and then they pay you a fee to kind of help them through from A to B?

Yeah. So we kind of help on both sides of, like I mentioned, what is the most tax-efficient asset for you to donate? And then, on the other side, are you actually achieving the charitable outcomes that you care about?

I focus a lot on the gifting side. I do a lot of our complex asset donations.

We have a client who has a plumbing business that’s selling, and they want to put 2% or 5% of it into a donor-advised fund. Or we have a client who wants to donate Bitcoin, something like that.

On the gifting side, we have some experts on our team who can walk you through, okay, is there a geography you’re interested in? Is there an impact area you’re interested in? What’s really the best way to solve the problem that you’re trying to solve?

What’s interesting is that, like I said, probably 75% of what we do is donor-advised funds. But a donor-advised fund isn’t always the solution.

For example, we had one client who came to us. I don’t know if you remember a few years ago, the Harvard president had to step down because of plagiarism. Do you recall that at all?

Yeah.

So, we had a donor come to us who’s very involved in Ivy League research and has had a pretty successful career.

She said, “This happens way more often than you’d think. There is actually a lot of plagiarism and a lot of stealing of work in the Ivy Leagues. And I really want to do something to solve this problem. I really want to combat this the best I can, but I’m not sure quite how to go about this. And I have a few million dollars I’d like to set aside to tackle this problem.”

And so where we ended up is actually another charitable product called a Field of Interest Fund.

What a Field of Interest Fund is, is it’s very similar to a donor-advised fund, but instead of the donor making the grant-making decisions, it is actually a panel of appointed experts.

So, what we did is we took the capital that that donor had set aside, put it into this Field of Interest Fund, and then we went out and interviewed a panel and got a board of appointed experts who are experts in the research field.

What these experts do is, when someone has a plagiarism case that they want to bring, the reason that they typically don’t—the reason that people get scared, these whistleblowers get scared to bring cases—is that they’re worried about facing legal repercussions from these schools.

These are very well-resourced schools, with large endowments and large budgets. So, when they have evidence of plagiarism, these whistleblowers get nervous about not being able to face the legal repercussions.

That’s what this Field of Interest Fund does: It allocates funding to protect those whistleblowers.

It provides funds to support their legal bills that they might face as a result.

And so, this Scientific Integrity Fund has allowed several whistleblowers to bring their cases forward without being in fear of facing legal repercussions.

Interesting. And I would’ve never thought of that, but now that you’re explaining it, it obviously makes perfect sense. And those cases you’re talking about probably would’ve never came forward if…

Yeah. And so that’s a very unique example.

Most people want to set assets aside, and then they want to pay their tithing every year or support their one or two favorite charities every year.

But there are some individuals who have really unique problems that they want to solve. And there are different ways to tackle that.

Explain to the listeners: What’s the case for a donor-advised fund?

I can imagine people are sitting here like, “Well, what’s the big deal? I just donate to a charity and write it off in that year.”

Is there a way you can break it down in really basic terms as to the reason why it’s such a great tool?

Yeah. And sometimes people say, “Well, if I have a few thousand dollars and I want to give it to charity, why should I route it through a donor-advised fund?”

The answer is, in that case, you shouldn’t. You should just give it to that nonprofit.

If you know exactly what you want to give, when you want to give it, and the charity can accept that asset, you should just give it to the charity.

Where a donor-advised fund makes sense is where you want to separate the tax consequences of your giving from when you actually do your giving, or if that charity can’t receive what you’re trying to donate.

We’ll sometimes get calls from nonprofits who say—here’s an example that we did recently. This nonprofit reached out to us and said, “Hey, we have a donor. He really wants to support us.”

“He’s open to doing a large donation, but not in cash. What he does have is four greenhouses on rural land, and he would like to use those to support us in the best way possible. But we have no idea what to do with that.”

And we said, “Okay, great. We can set up a donor-advised fund, get those greenhouses donated, get them appraised, give the donor as large of a tax deduction as we can, and then we can sell those greenhouses and get the proceeds over to you.”

This was a great example where the donor-advised fund was a perfect intermediary. This charity had an asset they couldn’t accept, and this donor was willing to make a large gift, but only if it was this obscure problem asset for him.

So he donated those greenhouses. They got appraised for around $700,000, which is great.

It was $700,000 for an ideal buyer. We worked on selling those for around eight months. We finally found a buyer at around half that.

But still, the charity, instead of turning away a gift, received a large donation, and the donor got his tax deduction for the fair market value of the asset.

So it was just a perfect win-win.

How does somebody know whether they need to start looking in other directions?

I mean, you just mentioned one. I wouldn’t even know what that would look like. I have a few greenhouses; I want to donate them. I think in that case, you’re like, “I have to call somebody who knows what they’re talking about.”

But even if they have cash or some other assets, is there a certain amount of money? Is there something that you would advise people to say, “All right, when you get to the…”?

Because you said, like, $3,000. Yeah, you maybe have a cause that you really like, and you donate that money.

But at what point does someone start to say, “Hmm, I think I need to start to get counsel on this and maybe look at other options?”

Yeah. So I think the threshold where it starts to make sense is you want to look at—for example, the standard deduction for a married couple in 2026 is $32,200.

And so, if your charitable giving is up around that number or exceeding that number, that’s probably where you want to start to look at a donor-advised fund.

The two things that you kind of want to ask are: Am I giving assets that are the most tax-efficient assets to be donating?

And then the second question is: Am I timing my donations, and am I bunching them in a way that makes sense?

So, for example, if you have a couple that’s married and they’re filing jointly and they do $20,000 of charitable giving a year, that $20,000 is going to fall below the standard deduction of $32,200.

And so every year they’re giving a lot away to charity, but they’re not getting any tax benefit from that.

Whereas if they took five years of giving—so, that $20,000 each year—and did it all upfront in year one to a donor-advised fund, so they did $100,000 into a donor-advised fund, now their donation in year one is $70,000 above the standard deduction.

So now they’re actually getting a large tax benefit from their charitable giving.

And then, now that it’s in a donor-advised fund, they can do the giving from there whenever they want.

So they could still give $20,000 out of their donor-advised fund each year.

The timing of their giving hasn’t changed at all. They’re still giving $20,000 a year to pay their tithing or to support the charity that they care about, but their tax picture has changed.

They’ve now received a large deduction in year one, and they can keep taking the standard deductions in years two through five.

And so that’s a strategy called charitable bunching. We see that a lot with our clients and the financial advisors that we work with.

Yeah. And just having somebody who can identify those things and be like, “Hey, look, I see you do this.”

A lot of times, that’s just having a good CPA and a good advisor to see those patterns and say, “Hey, have you ever considered this?”

Any other mistakes people are making?

I would say one other thing I would like to cover is a donor-advised fund.

So, you can obviously do your charitable giving out of it. But, like I mentioned, you can also invest those assets in the meantime to grow your charitable capital.

And that doesn’t need to be just in public securities. It really can be in any investment that you want to make.

I think what’s underappreciated in the industry is that a lot of things that you do out of your personal investing pocket, you can be doing tax-free with your charitable giving pocket.

I’ll give an example. We have one donor who’s very involved in Silicon Valley, a huge venture investor, and loves supporting emerging fund managers.

So, whether it’s women or people of color or really any emerging fund manager who might be disadvantaged in some way, who might have a hard time raising their first fund…

What he does is he uses his donor-advised fund to invest in those emerging fund managers.

So he’s the first check into their funds. And so that’s catalytic capital for them that they can say, “Hey, I already have an LP signed on.”

It helps them actually raise their funds and grow the venture capital ecosystem.

We have this donor who has done 20-plus venture capital fund investments out of his donor-advised fund.

Those dollars are never going to come back to him personally, but he views that as his philanthropic giving: investing into the ecosystem and just being generous with writing checks to emerging fund managers.

That’s a really unique example of where he could be doing that out of his personal pocket—and he would be if he didn’t have a donor-advised fund—but it would just be less tax-efficient.

And so there are a lot of things like that that you can move into your charitable giving pocket as opposed to your personal investing pocket.

It almost sounds like that just kind of highlights the importance of looking at all your assets and picking the ones that make the most sense.

You may say, “Hey, I want to take advantage of working with a donor-advised fund,” but maybe there are certain assets that you want to keep because they’re growing. There is a big capital gain there, but you also think there’s potential for them to continue to grow.

Even though they’re generous, they want to make sure they take advantage of that potential.

Maybe there are others that have grown a lot recently, but they don’t expect them to grow that much.

To me, it’s almost like it just highlights how important it is to look at all your different assets.

Obviously, if there’s cash and other assets, we definitely know we want to look at those, but it’s not just as simple as that.

Maybe there are other considerations, like how much it’s going to grow, how much it will grow, and looking at all your different assets.

Yeah. Looking at the entire picture, especially for those high-net-worth folks.

Yeah. No, there’s a lot of interesting ones.

We had another donor who came to us recently and said, “Hey, there’s an abandoned school in my community, and I want to buy it, fix it up, and turn it into a community center.

I was going to free up the cash in my personal brokerage accounts, but I’m realizing it’s way more tax-efficient if I did it out of a donor-advised fund.

I have a donor-advised fund at Fidelity. They’re not letting me do this. Would you guys let me do this?”

We looked into it and we said, “Absolutely.”

And so he moved his donor-advised fund from Fidelity Charitable to us.

Now we’re under contract purchasing that school building that he’s going to turn into a community center.

And so that’s another really interesting example where you know what you want to do.

You have the goal you want to accomplish. And now it’s just, okay, what’s the most tax-efficient way to get there?

Interesting. How does the crowd here reach out to you or learn more about you? Where’s a good place to go to get in touch with you?

Yeah. So we have a page on our website. It’s just uicharitable.org. So that’s the letters UI and then charitable.org, and then “/learn-more.”

That’ll have more materials, more examples, as well as an option to schedule a call if anyone’s interested in learning more.

Thanks for your time today. That’s all the questions I have for you.

And thanks, everybody out there, for joining us for this episode of The Agent of Wealth Podcast.

For those who aren’t familiar with our business, Bautis Financial is a wealth management and financial planning firm. We are accepting new clients.

If you want to learn more about us and how we might be able to help you take all the guesswork out of managing your money, we’d be happy to speak with you.

Just go to www.bautisfinancial.com/call. And we’ll include all the information on Phoenix in the show notes here.

Thanks, everyone, for tuning in to today’s episode. And thanks for joining me, Phoenix.