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Kathryn Rodman: Benefits of Donor Advised Funds

Donor advised funds (DAFs) are an incredibly popular way of giving if you want to make a difference, but don’t have enough resources to set up your own private foundation. Here are just a few of our favorite reasons to open a donor advised fund with the Community Foundation of Greater Greensboro (CFGG).

Give however is best for you

Donor advised funds can be opened and added to with traditional methods like cash, credit card, and check. We also even accept stocks, bonds, mutual fund shares, life insurance, and estate gifts!

Our expertise

We vet every requested DAF grant through IRS guidelines to ensure all gifts go to legitimate public charities, big or small, and can even direct grants internationally. You receive reports each time you direct grants as well as quarterly reports on your fund’s balance. Want to make your gifts to charities anonymously? No problem!

CFGG has connections with over 700 local nonprofits. If you’re overwhelmed by the number of charities doing great work in the community, we’re here to help you research and support those that are doing the work you care most about right here in Greensboro – whether that’s healthcare access, environmental causes, or food insecurity.

Tax benefits

You can make tax season easier on yourself by directing all your charitable giving to your Donor Advised Fund, and you’ll only have to keep track of one gift receipt. Then, you can direct your grants to your favorite non-profit organizations at any time of year – no more rushing to make sure you get it all done before December 31 to be eligible for write-offs.

If you have a big year in the stock market, you can eliminate capital gains taxes by donating those shares straight to your DAF. Similarly, if you’re selling a property, business, or other large entity, opening a donor advised fund with the profits can help manage the tax hit you could otherwise take.

If you donate consistently, you can “pre-pay” multiple years’ worth of donations into a donor advised fund and utilize the tax deduction in a single year. For example, if you usually give $10,000 annually, you can donate five years’ worth to the DAF and claim the deduction for $50,000 in a single year; then, you can direct a grant of $10,000 each year to your charity of choice for the next five years.

Keep it going

We can document your wishes for how you’d like your donor advised fund to be managed after your lifetime – whether that’s appointing a successor advisor or moving your funds to a permanent endowment that will contribute to your favorite causes in perpetuity. Additionally, assets in a fund aren’t subject to estate taxes, so they can help reduce the burden on your family after you’re gone.

DAFs are a great way to set up your family’s next generation to be philanthropic; you can even open donor advised funds for your children or grandchildren.

For additional information, please contact me at krodman@cfgg.org or (336) 379-9100.

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