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Donor Advised Funds

December 3rd, 2007 at 11:26 pm


If you are planning on making charitable gifts at the end of the year, to support your favorite charities and be able to claim a 2007 tax deduction, now is the time to consider setting up a Donor Advised Fund.

You may already know that giving appreciated long-term capital gain stock to a charitable organization gives you a double tax savings. You may deduct the full market value of the stock as a charitable deduction plus you are not required to pay capital gains taxes on the stocks appreciated value. However, to give stock directly to multiple organizations can be both cumbersome and time consuming.

To overcome the problems of directly gifting appreciated stock, you can create a Donor Advised Fund. These are qualified, private, non-operating foundations that pool their donations and allow donors to select qualified charities for gifts.

Donor Advised Funds are simple to establish. Fidelity, Schwab, Vanguard and other brokerage firms offer these accounts. You may even deduct more in a given year than you actually grant to your chosen charitable organizations, with any excess available for future charitable gifts.

Donor Advised Funds are similar to having your own charitable foundation, without the overhead and legal expenses required to establish a foundation. If this approach seems appropriate for you, either visit on-line or call your brokerage firm today.

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