Charitable Planning

If you’re considering creating a private foundation for your philanthropic efforts, a donor-advised fund might be a better choice. A donor-advised fund (DAF) is an account established at a sponsoring charity. You make irrevocable contributions of cash, securities or other assets to the DAF and receive an immediate tax deduction.

In an investment environment that’s seen endowment assets drop and administrative costs climb many families nationwide are eschewing the cache of small foundations for donor-advised funds. Why? Lower administrative costs and flexibility mean that more money goes to their charitable causes.

Perhaps lost in all the posturing about what would become of the Bush tax cuts was a valuable extension for qualified charitable distributions. The 2010 Tax Relief Act extended the tax-free distributions from Individual Retirement Accounts (IRAs) for charitable purposes through 2011 i.e. Qualified Charitable Distributions (QCDs).

Now’s the season for helping others who are less fortunate than you by giving your time talents and resources to a worthy charitable cause.

A few weeks ago more than three dozen billionaires signed up for The Giving Pledge an effort by Bill and Melinda Gates and Warren Buffett to encourage wealthy people to give at least half of their fortunes to charity.