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Donor Advised Fund

January 30, 2024

Charitable giving is an essential aspect for many households. We often tend to write a check to our preferred charity without giving it much thought. However, this method may not always be the most beneficial for tax planning purposes. There are several ways to donate to your favorite charities. Over the next few weeks, I aim to share with you some strategies that can help you support your charities while maximizing the benefits for you and your household. 

This week's strategy is called a donor-advised fund. You may consider this option if you are not getting a tax benefit for your donations through Schedule A on your tax return because you are taking the standard deduction.

Another reason to consider a donor-advised fund is if you have a large amount of income in one tax year and would like to make a more significant donation in one year for the deduction while spreading the donations over a few years.

There are various ways to make contributions to a donor-advised fund. The easiest method is by writing a check and funding it with cash. Another popular option is to donate appreciated stocks to the fund. We will be sharing more about the benefits of donating appreciated stock shortly. Other assets can also
be used to fund the donor-advised fund, but the two listed are the most common.

Attached is a document that provides an in-depth explanation of the donor-advised fund. I would suggest you consider consulting with our office or tax preparer to determine whether a donor-advised fund would benefit your situation.

Donor Advised Fund