Gifts from Special Sources

Bascom Hill in AutumnMany of our supporters have established donor-advised funds (DAFs) to provide support for the various charitable organizations in which they believe. A donor-advised fund is an account offered by a sponsoring organization (often a community foundation) that accepts a donor’s gifts and then makes charitable donations according to the donor’s directions. A year-end gift from your DAF is an efficient method of benefiting our organization. While your gift to a DAF is immediately deductible for federal income-tax purposes, your distributions to charities can be parceled over time. There would be no additional income-tax deduction when a distribution is made from the DAF because a deduction was obtained for the original transfer to the DAF.

Most donors make frequent additional contributions to their DAFs over time; this permits them to establish managed programs for their annual charitable gifts. And more donors are involving their children in their decision-making processes, teaching them the virtues of philanthropy.

Special Situations for 2010

If you have converted or are considering converting your regular IRA to a Roth IRA but are concerned about having to pay income tax on the conversion, either with this year’s tax return or spread over the next two years, consider accelerating the charitable contributions you would ordinarily make for the next five or ten years into your DAF this year.

Please contact us to see how we may help you achieve your charitable objectives.

Planning Pointer: A donor-advised fund can be established with a significantly lower initial investment of assets than through a private foundation.
Why: The latter is expensive to manage and subject to onerous and restrictive income-tax rules.

Learn more

Find gift-planning articles and advice.