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Facts You Should Know About Donor Advised
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A Donor Advised Fund with The Community Foundation is like a charitable gift fund with an emphasis on your community and philanthropic interests, or like a private foundation without the extra work. In short, we can help make your philanthropy efficient and effective. A Donor Advised Fund with The Community Foundation benefits you, your family and the community.
AVOID CAPITAL GAINS TAXES ON LONG-TERM APPRECIATED SECURITIES Giving long-term, appreciated securities, privately held business interests or other long-term, appreciated assets can generate larger tax benefits for you than giving cash. By contributing the securities to your Donor Advised Fund, you make the same size gift but you pay no capital gains tax whatsoever on gifted assets. The minimum initial contribution to establish your Donor Advised Fund is $5,000-and you can make additional contributions of any size at any time. And, just as with your initial contribution, additional contributions are deductible in the year they are made.
REDUCE ESTATE TAXES FOR YOUR HEIRS Despite the 2001 tax legislation, estate taxes could still take a huge bite out of the assets you have built over your lifetime. Our donor-advised fund is a positive way to help you manage estate tax issues for your heirs. The assets you contribute to your donor-advised fund during your lifetime are not subject to estate taxes. A contribution to your Donor Advised Fund and any earnings are not considered part of the your estate and are not subject to probate.* Some donors can take “in-kind” distributions of company stock
from their 401(k) plans and take advantage of Net Unrealized Appreciation
(NUA). You’ll pay taxes on the cost basis of long term appreciated
securities held in the plan but can take a tax deduction on the current
value of any of this stock that you give. This is a good way to manage
taxes on 401(k) withdrawals during your lifetime and as part of your estate
plan.
REDUCE YOUR TAX LIABILITY IN HIGH-INCOME YEARS Your donor-advised fund is an effective tool for reducing your current income taxes while streamlining your support for multiple charities. Every contribution you make to your Donor Advised Fund can be deducted from that year's federal income taxes, up to 50% of adjusted gross income for cash gifts and 30% of adjusted gross income for appreciated securities. You can contribute as much as you want in any given year. You can recommend grants to charities immediately, next year or whenever you are ready.
FEEL CONFIDENT , THANKS TO THE FOUNDATION'S MONEY MANAGEMENT EXPERTISE The Community Foundation is entrusted with the investment and management of its charitable funds and the wishes of its donors in the best interest of the communities we serve. The Board of Directors views the assets held by The Foundation as endowment funds designed for long-term growth. To that end, the investment objective of The Foundation is to preserve the real purchasing power of the assets. The Foundation aims to earn a total rate of return over full market cycles that will support the spending policy-5% of the value of the fund over a 20-quarter rolling average. The Foundation’s Investments Management Committee administers the investment policy and its objectives.
ADMINISTRATIVE SUPPORT The Foundation’s Donor Advised Fund program is designed to make your charitable giving extremely easy. A staff member will be designated to work with you. Our staff handles all fund maintenance, investment management and distributions from your fund, as well as tax reporting and record keeping. You receive timely confirmation of every gift made from your fund, and each quarter you receive a report on your fund balance and activity. In addition, instead of having to track down and secure a receipt for each gift you make to a charity, with your Donor Advised Fund you need keep only the receipt for the gifts you make to your fund, which greatly simplifies your tax filings.
FLEXIBLE GRANT MAKING When you create an endowed donor advised fund at The Community Foundation, you are able to:
With your fund at The Foundation, you may recommend gifts to any IRS qualified public charity you choose--here in the South Alabama area--or anywhere in the United States. We make it easy to carry out your giving wishes--and there are only two restrictions: 1. Advised funds may not make gifts that will personally benefit a donor
or an advisor.
Your Donor Advised Fund is designed to work seamlessly, regardless of whether you wish to be recognized for your generosity or remain anonymous. Just let us know your preference - and we will carry out your wishes. Regardless of your choice, we will generate a letter and a check for the charity and you will receive confirmation of each gift as soon as it is made. The name of your fund is also your choice. It can carry your name, your
family name, or the name of a loved one-it’s up to you.
You can name someone to continue to recommend gifts from your fund after
your death or if you become incapacitated. Or, if you prefer the Foundation
will make grants from your fund to the most pressing needs of our community.
The Foundation will honor a second generation of advisors. At the death
of the successor advisor, your advised fund will convert to an unrestricted
fund at The Foundation, bearing your name. Your fund will continue to
give grants in your area of interest, and in your name, in perpetuity.
A Donor Advised Fund offers many of the advantages of a private foundation without the initial set-up costs, ongoing excise taxes, and administrative expenses. Your gift to a establish a Donor Advised Fund receives more advantageous tax treatment, as well as reduced expenses and burdens, because The Community Foundation is a public charity. With a Donor Advised Fund, you can maximize your tax savings and simplify your charitable giving. Beyond the tax incentives of creating a Donor Advised Fund, The Community Foundation supports its advisors with knowledgeable, professional grant making staff that will help you get the most from your grant making.
COMPARISON OF KEY FEATURES Donor advised fund vs. a private foundation:
Income tax deductions:
HOW TO START A DONOR ADVISED FUND WITH THE COMMUNITY FOUNDATION
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