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Donor-Advised Funds: Are they right for you?

Making the decision to donate to your favorite charity is usually an easy decision. When you think about a cause you are passionate about, it is likely to bring a smile to your face knowing a real impact is being made. Planning how to give wisely to your favorite charity, however, is often a different story. Very commonly this requires a review of your overall financial picture, including markets, available cash, tax deductions, and other variables.

What if you could maximize your gifts to your favorite charity, ministry, or local church while making the process of giving easier than ever?

Donor-Advised Funds Provide Convenience:

Using a Donor-Advised Fund (DAF) can be incredibly helpful and may be the answer you are looking for. The sole purpose of this fund is to support qualified charitable organizations that you believe in. At your discretion, you advise the fund to direct gifts to the charities of your choice.

DAFs can be set up with community foundations and many brokerage firms, mutual fund companies, or Christian organizations. Instead of giving directly to your favorite charity, you make the gift into your fund which is held within the non-profit organization. The funds can be invested for growth or held in cash, and grants can be sent out immediately, over months, years, or can even be set up as an endowment. And the best part, you'll only receive one charitable tax receipt in the year you make the donation to your fund.

Additionally, as with all cash (or stock) gifts, you receive a current year charitable tax deduction for the gift, if you itemize. DAFs are a great vehicle for turning complex assets, like real estate or business interest, into funding for your favorites charities as well.

Tax Planning Benefits:

Giving to a DAF can be a very strategic tax planning opportunity for individuals who wish to offset a high-income year with a proportional deduction, or for those who would like to avoid paying capital gains on appreciated stock. Both scenarios provide tax incentives as well as the flexibility to control when the grants are made to charity. Strategic giving results in more dollars going to fund ministry instead of going to taxes.

Focus on the Family receives DAF grants from friends of the ministry just like you and our Planned Giving team would be happy to discuss this option with you in more detail. Whether you have a fund that has been set up for years or you are just starting the process, we are happy to discuss how you can support the ministry and kingdom causes you truly care about through a DAF.

To learn more about Donor-Advised Funds, please click here.

Contact our Planned Giving Team at: 800-782-8227 -or- FocusPlannedGiving@fotf.org

Disclaimer: Focus on the Family does not provide legal, tax, financial, or other professional advice. You should consult professional advisors concerning the legal, tax, or financial consequences of your charitable activities.