If your clients are like most, they think about a variety of financial decisions throughout the year, only to act on them quickly by December 31st.
Charitable giving often occurs in the same way. Donors make their gifts in a rush by the end of the year - for tax reasons, or because they made a promise to their favorite nonprofits they intended to make all year, but somehow managed to put it off until the final days.
A charitable giving fund, or Donor Advised Fund (DAF), is the perfect solution for the end of year crunch. These funds can be opened in as little as 10 minutes.
The donor gets an immediate tax deduction, there is no gift minimum, and the fund can support any charities throughout the U.S. at a later date.
Also, the concept of “bunching” donations into a DAF is a popular strategy after the new tax law changes passed last year. What is “bunching”? It’s basically 'pre-funding' your future giving all in one tax year.
DAFs are perfect for bunching because a donor can receive maximum tax benefits in the year they need the charitable tax deduction while distributing the funds out to their favorite charities at a later date.
DAFs, unlike private foundations, do not have a mandatory annual distribution rate, making it more user-friendly for donor’s long-term giving goals.
Need help with a DAF? Call Sheila Kinman, Senior Vice President for Philanthropic Giving, at 561.340.4503 or email her here.