Timely Topic: What You Should Know About a Donor Advised Fund

Advanced Financial Planning | Financial Planning | Videos | Tax Strategy | Wealth Management | Investment Strategy

 Plancorp team By: Plancorp team

As end-of-year tax planning draws to a close, there is still a small window of time to set up a Donor Advised Fund if you wish to make charitable donations in the next few years and take advantage of the tax benefit from charitable giving.

Watch (or listen) to Peter Lazaroff and Daniel Lee in this quick video from Plancorp's wealth management team to learn everything you should know about a Donor Advised Fund.

Daniel and Peter will answer the most common questions we receive, including: 

  • What is a Donor Advised Fund?
  • How does a Donor Advised Fund work?
  • What are the tax benefits with a Donor Advised Fund? 
  • What strategy can you use to increase your tax benefit and give more to the charities of your choice?
  • How do you benefit from an itemized deduction versus a standard deduction? 
  • What other items, such as appreciated securities, can you add to a Donor Advised Fund? 
  • What are the key dates to keep in mind if you want to set up a Donor Advised Fund?


Set Up Your Donor Advised Fund by December 7

The best time to set up your Donor Advised Fund is between now and the first week in December. This allows enough time to get the account set up and funded amidst the hustle and bustle of the holiday season.

Technically, December 31 is the deadline, but waiting until it's too late may cause you to miss out on this valuable tax and charitable giving strategy 

How to Set Up Your Donor Advised Fund    

Are you a Plancorp client?

If you're interested in setting up a Donor Advised Fund, reach out to your Wealth Management team member and ask them to get the ball rolling.

Not a Plancorp client? No problem.

Schedule a 15-minute call with our team and we can discuss how this strategy could help you.

Looking for more personalized financial guidance?

Complete this simple 9-question assessment to get personalized guidance on what you need to turn your situation into financial success.

Top Takeaways from Our Q&A Video on Donor Advised Funds

  • A Donor Advised Fund is a special type of tax-advantaged account that is used to make donations to charity. While very similar to an IRA, an IRA is used to save for retirement.   
  • A strategy we recommend to individuals who value charitable giving is to set up a Donor Advised Fund and fund it with multiple years worth of donations. This gives you the tax benefit from an itemized deduction versus the standard deduction. Plus you get a full deduction on the amount that you contribute in that year but you can spread out the amount you give away to charity.
  • Another one of our favorite strategies is to use appreciated securities to put into your Donor Advised Fund. Not only do you get the deduction but you also remove the embedded gains. In other words, you don't have to pay the capital gains that are in your appreciated securities. 

Additional Tax Topics to Read

End-of-Year Tax Planning Tips

Getting More from Giving Back

How Tax Projections Help You Make Better Financial Decisions

Give to Charity Without Giving Up Your Tax Deduction Using a Donor Advised Fund

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