Have you ever wished there was an easier and more strategic way to approach your charitable giving? Does the idea of growing your charitable dollars for greater impact appeal to you? Do you have assets other than cash you can use for charitable giving? Would you like to know more about charitable organizations and projects across central Georgia? If you answered ‘yes’ to any of these, a donor advised fund may be just the tool to optimize your charitable giving.
What is a Donor Advised Fund?
As a fund specifically established for charitable giving, donor advised funds are a simple and tax-efficient way to support the charitable organizations and causes important to you. Think of it as an investment account for organizing your charitable giving. You can choose to contribute just about any personal asset, receive an immediate tax deduction for the gift, and then distribute the money to your chosen charities over time.
How Does a Donor Advised Fund Work?
Giving through a donor advised fund is easy and happens in three simple steps:
- Make a tax-deductible donation – Open a fund with a donation of any size and from just about any type of asset and receive a tax deduction for the current year.
- Support your favorite charities – When you are ready, support your favorite charities with the money you have put into your donor advised fund. There is no minimum fund size required, and you can start giving to charity immediately or wait, if you choose.
- Grow your fund balance – While you are deciding on which nonprofits to support, your contributions are invested and can grow tax free, giving you potentially even more money for charitable giving.
What are the Benefits of a Donor Advised Fund?
A donor advised fund allows you to play an active role in your charitable giving and is advantageous for several reasons:
- Simple & Efficient – A donor advised fund can be set up and running as soon as the fund agreement is completed. And you can easily access your fund balance, giving history and recommend grants anytime through CFCG’s Web Portal. The Community Foundation handles the recording keeping and takes care of doing due diligence on the charities you recommend to receive a grant from your fund.
- Tax-Smart – When you transfer assets to your fund, you will receive an immediate tax deduction and a single tax receipt allowing you to easily give to nonprofits on your timetable. You can also contribute appreciated assets that have been held for more than a year without paying capital gains taxes.
- Flexible – You can add to your donor advised fund anytime you want, and CFCG can accept donations of almost any asset.
Is a Donor Advised Fund right for me?
Whether or not a donor advised fund makes sense for you depends on your personal situation. If you want to make a sizeable contribution in a calendar year but defer paying it out directly to a charity because you either want to invest and grow the balance or because you have yet to decide which charities to support, a donor advised fund is a beneficial solution.
It is also an efficient choice if you would like to donate appreciated securities or other complex assets that smaller charitable organizations are not equipped to accept.
You may also choose to remain anonymous if you wish to grant money to your favorite charities privately.
A donor advised fund also affords the opportunity to involve your family in your charitable giving so you can pass along your family’s legacy to future generations.
When thinking about your charitable giving, be sure to explore how a donor advised fund could help you support local nonprofits, maximize your tax benefits and provide a vehicle for your charitable dollars to grow over time so you can help causes around central Georgia for years to come.
CFCG has been helping donors support their favorite charities for nearly 30 years, and we look forward to helping you maximize your charitable giving with a donor advised fund.
For more information on how you can open a donor-advised fund, contact Julia Wood at firstname.lastname@example.org or (478) 750-9338.