Giving shouldn’t be complicated. If you are looking for a simple, flexible, and tax-wise way to manage your giving, consider a donor advised fund. Essentially a giving investment account, a donor advised fund allows you to make irrevocable charitable contributions when the timing is right for you and receive an immediate tax deduction. Donations to your fund are then invested for tax-free growth. When you are ready, you may recommend distributions from your fund to a wide variety of qualified ministries and charitable organizations. Donor advised funds are also a great way to start a giving conversation with your family and allow your legacy to continue after you are gone.
FM Financial works with GuideStream Donor Advised Funds to provide clients with this unique giving strategy. An online donor portal makes giving especially easy. Visit www.guidestreamdaf.org to view the refreshed website and learn more about donor advised funds.
Key Advantages of Donor Advised Funds
Flexibility – Make an irrevocable charitable contribution when the time is right and recommend distributions over time as you are ready.
Tax Benefits – Immediately receive the tax benefits for your gift of cash, appreciated securities, appreciated real estate, and more. Consider “bunching” your giving to take advantage of itemized deductions in a given year.
Growth – Your irrevocable contributions grow tax-free until distribution.
Simplicity – Manage all of your giving in one place; give one gift and divide it among several organizations over time.
Legacy – Involve your family in your giving, even beyond your lifetime.
Here are a few examples of how a donor advised fund can work for you:
Giving Together – The parents of one of our donor families set up an account. Every year at Thanksgiving, they set aside time to meet together and determine their charitable giving for the next year. The kids will take over when mom and dad pass away and continue teaching generosity to the next generation.
Bunching Strategy – In order to take advantage of itemizing charitable contributions, many donors make larger contributions to their fund in a given year to cover their giving for several years. They then make distributions as desired over time. Giving appreciated securities or real estate is a great way to take advantage of this strategy.
One Gift / Many Recipients – Donor advised funds are a great vehicle for splitting one gift among many recipients. You make one gift (easy!) and then recommend distributions as you are ready over time to various ministries or charitable organizations. Again, giving appreciated securities or real estate is a great way to employ this method.
Organize Your Giving – There are many ways to make charitable gifts … cash, check, credit/debit card, recurring electronic gifts, websites, just to name a few. With a donor advised fund, you can consolidate your giving in one place. Your fund statements and donor portal will naturally keep a record of all contributions and distributions.
