In conjunction with our tax advisors at DHG, we have helped many clients over the years fulfill their goals for charitable giving while enjoying a reduction in their tax obligation during the calendar year of the donation.  

A Donor-Advised Fund is one way to accomplish that goal.  It works particularly well during a year of a significant positive change in circumstances; such as an unexpected bonus or a large deferred compensation payment.  For example, an individual may make a regular donation to a specific charity each year.  In the year of a significant bonus, they may choose to fund 5-10 years of charitable intent at once, by making a deposit to a Donor-Advised Fund.  

It allows an individual to take a deduction for the whole amount contributed; but doesn’t require the donor to distribute the funds to charity right away.  Instead, they’ve created a “charitable checkbook” allowing for the funds to be paid out to qualified charities over a period of their choosing.  The funds can also be invested between the period of deposit and distribution, allowing for potential tax-free growth.

We’ve attached an article that provides even more detail on Donor-Advised Funds and their potential benefit.  If a Donor-Advised Fund sounds like something that may be right for you, we would welcome the opportunity to work with you and your tax advisor to help you accomplish your goals.