The Convenience and Simplicity of Donor Advised Funds
Your financial and charitable goals are a reflection of your commitment to support the future of your loved ones, charitable organizations you value, such as ours, and the greater community. But sometimes it can be difficult to keep track of the organizations you wish to support and the documents required to receive your benefits from charitable gifts. A convenient and easy way to organize your charitable intentions is to create a donor advised fund. Consider it one-stop giving.
How It Works
- You open a donor advised fund by a written agreement at a community foundation or sponsoring organization. Most donor advised funds require a minimum gift to open your fund, although additional contributions may be less.
- You can name your loved ones as your successor to continue to recommend grants to charitable organizations, or you can name North Shore Animal League America as a beneficiary to receive all or part of the account after your lifetime.
- You can make contributions to your fund at any time. Your contributions are invested by the sponsoring organization, which provides a regular accounting to you.
- You make the recommendations that various amounts be distributed to charitable organizations of your choice, such as ours.
- You qualify for a federal income tax charitable deduction for gifts to your donor advised fund.
3 Tips for Choosing Where to Set Up Your Fund
- Evaluate the sponsoring organization carefully—When you make a gift to a donor advised fund, you irrevocably give away your money or property. Make sure the organization you select is one that supports your values.
- Understand the fund's policies and procedures—Minimum contributions, as well as the amount and frequency of grant recommendations, all vary depending upon the sponsoring organization.
- Consider costs and investment—All donor advised funds charge administrative fees that can vary considerably. In addition, investment performance will vary from one donor advised fund to the next, affecting the amount that will actually be distributable to a charitable organization.
- Convenience—Setting up a donor advised fund qualifies you for a federal income tax charitable deduction when you make a gift to the fund—without immediately having to choose the charities you want to support.
- Simplicity—You can support a number of charitable organizations without having to retain records for a number of separate contributions.
- Family philanthropy—Families can build a tradition of giving and teach their children the values of philanthropy by involving them in the decisions about which grants to recommend.
If you would like more information on setting up a donor advised fund to support organizations important to you, such as ours, please contact us today.
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