Use a Donor Advised Fund to Maximize Your Charitable Contributions |
Recently, Ray met with a business owner who was selling his business and retiring. He wanted to discuss tax-efficient strategies to help offset some of the profit in his business and make an impact through generous charitable giving. Ray explained the benefits of a Donor-Advised Fund (DAF). If you make regular financial contributions to charitable organizations and want to maximize the funds you already give, donating through a donor-advised fund could be an option. A DAF is a type of investment account that allows you to support the charitable organizations you already give to or new ones. It is a separate fund or account maintained and operated by a 501(c)(3) organization or the sponsoring organization. Through a DAF, you can contribute cash or other assets, and you may be eligible to take a tax deduction for your charitable contributions. Then the funds you gave to the charity can be invested with our supervision and grow tax-free. Additionally, a DAF may provide better returns than giving cash directly to a charity. This means that your contributions will go further and your charitable donations continue to serve the organization for longer than if you provided a standard cash donation. Through a donor-advised fund, your donation is tax-deductible, you can choose the organizations you want to give to and set up recurring donations to make giving automatic. Depending on the donor-advised fund, you can give cash, stocks, mutual funds, ETFs, bonds, and possibly other assets. You can donate to a non-profit organization and know that your generosity is helping the organizations you care about and that you're helping make the most of the contributions they receive. If you're interested in donating to a DAF and would like to learn more, please contact our office. Generally, a donor-advised fund is a separately identified fund or account that is maintained and operated by a section 501(c)(3) organization, which is called a sponsoring organization. Each account is composed of contributions made by individual donors. Once the donor makes the contribution, the organization has legal control over it. However, the donor, or the donor's representative, retains advisory privileges with respect to the distribution of funds and the investment of assets in the account. Donors take a tax deduction for all contributions at the time they are made, even though the money may not be dispersed to a charity until much later. All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful. For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisors LLC nor any of its representatives may give legal or tax advice. This material was developed and prepared by a third party for use by your Registered Representative. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. The content is developed from sources believed to be providing accurate information. |
Make the Most of Your Charitable Contributions
