Start your own Donor Advised Fund
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Donor Advised Funds
A Donor Advised Fund is a charitable giving vehicle where an individual, family or corporation makes an irrevocable, tax-deductible contribution of personal assets to a charity and at any time thereafter can recommend grant distributions to qualified charitable organizations.
TCN's Donor Advised Funds provide the donor with all of the tax planning advantages that are associated with making gifts to a public charity along with the philanthropic planning benefits typically reserved for those who establish private foundations. Read the Donor Advised Fund Program Guide.
Unlike a private foundation, you do not incur any initial expense when you establish a Donor Advised Fund. As the donor, you need only indicate on a simple form what your fund will be named; who will be allowed to give charitable grant advise; and what and how much is being given as the initial gift to establish your Fund.
Here's how a donor Adivsed Fund can benefit you:
- A reduction in your income tax will be realized if you itemize, whether you donate cash or other assets. You will avoid capital gains taxes on long-term appreciated assets if you make the gift before you sell.
- Your gifted assets are removed from your estate so your estate won't be subject to estate tax.
- You can suggest that your legacy benefit the work dearest to your heart during your lifetime -- creating a family tradition of giving and a legacy that lives long after you.
- Your gift will grow, providing greater support to your favorite charities and/or ministries.
- The advantages of a private foundation are yours, but you avoid expensive startup and ongoing administrative costs. Your gift is also not subject to the lower charitable contribution limits set on gifts to a private foundation.
Tax Advantages
TCN's Donor Advised Fund offers many tax advantages. In addition to receiving an immediate tax deduction, donors have the flexibility to designate grants whenever it best suits them, the opportunity to lower their current taxes and the convenience of being able to more easily track and plan charitable activities for future tax years.
A donor's contribution to the fund is an irrevocable charitable donation, fully deductible on the date it's received by the foundation. The extent of the deduction depends on the type of asset being contributed, as well as the donor's particular tax situation.
Individuals should always consult their legal and tax advisors to discuss the personal circumstances regarding their income and estate taxes.
Cash contributions
Cash contributions are eligible for a federal income tax deduction of up to 50% of adjusted gross income (AGI) in the tax year in which the contribution is made. If contributions exceed this limit, the deduction may be carried forward up to five years.
Publicly traded securities
For publicly traded securities held for more than one year, the amount of the deduction is the mean value of the high and low prices of the security on the date of the contribution.
Donors may generally deduct up to 30% of their AGI for contributions of appreciated securities held more than one year. For securities held for one year or less, the deduction is based on either the donor's cost basis or fair market value, whichever is lower. If their contribution exceeds the 30% AGI limit, the deduction may be carried forward up to five years.
Estate taxes
All contributions to TCN's Donor Advised Fund are separate from the donor's estate and therefore are not subject to either estate or probate taxes.
Account income
Any income to a client's donor-advised fund account resulting from investment growth is exempt from taxes, but is not deductible.
Capital gains
One of the most rewarding benefits of donor-advised funds is the ability to contribute appreciated assets without incurring capital gains tax liability.
Maximum Tax Planning Advantages - You may make gifts into your Fund at any time. Gifts of appreciated property yield a deduction for the full fair-market value of the asset, and capital gains tax on the imbedded gain is eliminated.
Other Advantages
Philanthropic Management - The Donor Advised Fund is administered by the Trust Counselor's Network (TCN), a public charity that acts as the host for the program. All grants are processed promptly and efficiently based on the donor's recommendation, and TCN maintains all necessary records for the Fund.
Asset Management - All assets are professionally managed by Summit Trust Co., and we offer donors a choice of investment strategies tailored to the Donor Advised Fund program.
Supporting Charitable Pursuits - The Donor Advised Fund program gives donors the opportunity to support the charitable endeavors that are important to them and to make charitable distributions from their Fund to the arts, education, social services, health care, and other fields of personal philanthropic interest.
Family Involvement - We encourage donors who establish these Funds to share their involvement with family members so that they, too, learn to be philanthropists and give back to their communities.
Online Capabilities - Virtually all of your Fund related activity can be conducted on our website: click here to view. This includes making an application to start a Fund, requesting information or materials, checking on deposits into as well as allocations and distributions from your Fund, etc. You can even choose your own secure password to use whenever you log on to our website.
Click here to learn more about TCN's Donor Advised Fund.
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