Why Everyone Loves the Donor Advised Fund

They're Simple and Straightforward

Donor advised funds are quickly becoming one of the most popular ways to support charitable causes. Thanks to their tax benefits and easy accounting, there’s no better time to discover this convenient way to give.

What Is It?

A donor advised fund is an account you set up with a charitable sponsor such as a community foundation or financial services company.

You can:

  • Open one with a written agreement that gives you (or other family members) the right to recommend distributions to nonprofits such as the foundation.
  • Contribute cash or appreciated property to your fund and qualify for a tax deduction when you make the gift.
  • Take your time to make recommendations for which nonprofits you want to support.
  • Support multiple charitable organizations without having to retain records for each contribution.

Your gift will:

  • Grow tax-free until the funds are disbursed to a qualified nonprofit.
  • Impact the foundation for a long time. You can choose family members or friends to continue to recommend grants to charitable organizations, continuing your personal legacy and passing on the value of philanthropy.

You can also name the foundation as a beneficiary to receive all or part of the account after your lifetime. If you choose to do so, please let us know of your gift so we can ensure you’re recognized for your generosity and that your wishes are carried out as you would see fit.

Example

Bob and Sandra Smith want to give back in a way that will benefit the foundation. The couple establishes a $30,000 donor advised fund with a community foundation. They receive a federal income tax charitable deduction for the amount of the gift. They recommend grants for Conquer Cancer, a local children’s hospital and an area food bank. The foundation presents the nonprofits with checks from the Margaret Smith Fund, which the couple named in honor of Bob’s mother. They name Conquer Cancer as the beneficiary to receive the account balance after their lifetimes, making an impact in the future.

Next Steps

If you would like to learn more about how a donor advised fund can simplify your charitable giving or how you can use it to extend your legacy at the foundation, please contact Karen Jupiter, CFRE at (571) 483-1446 or Karen.Jupiter@conquer.org.