November 24, 2021 – A “Donor Advised Fund” is a charitable giving vehicle, administered by a public charity, to manage donations on behalf of individuals and families. It allows donors to make a charitable contribution, receive an immediate tax deduction, and recommend grants over time. Donors can contribute to the fund as frequently as they like, and then recommend grants to their favorite charities whenever it makes sense. For the charitably inclined, it offers some great tax strategies:
- Donate appreciated securities, get a full tax deduction, and avoid capital gain tax.
- “Overfund” the DAF during your working years to maintain a balance to donate during retirement years when cash flow might be restricted.
- Make large donations to the DAF to offset income recognized on large transactions such as stock option exercise, vesting restricted stock, or a sale of a business or real estate.
- We encourage clients to use the DAF to introduce children to the world of philanthropy and create a family experience centered on helping the good cause of their choice.
Please get in touch with us with any questions, and feel free to pass along this information to family or friends who may be interested.
