Donor Advised Funds May Be More Beneficial Than You Think

Donor Advised Funds May Be More Beneficial Than You Think

Donor Advised Funds (DAF) are popular vehicles of generosity. DAF’s are giving accounts that are opened with public charities, and as a donor, you can recommend grants to the charities you’ve selected to be the beneficiaries of your generosity.

DAFs not only benefit the charity itself, but the donor of the funds, as well.

One of the biggest benefits to a DAF is the ability to maximize potential tax benefits. Donations to these accounts are immediately tax deductible, and so is the profitable growth from the investment of assets in the DAF.

It’s possible to be eligible for additional benefits as well. For instance, a contribution of cash could result in a tax deduction of up to 60% on your adjusted gross income (AGI). Donating long-term appreciated assets could also pay off (resulting in a potential deduction of the asset’s fair-market value, less than 30% of your AGI). Those donations, provided that you’ve owned them for longer than year, could also eliminate capital gains taxes.

Additional benefits to a DAF are simplicity and consolidation. You can compile your charitable resources into one account, rather than trying to keep track of multiple gift acknowledgements from every charity that you support, every time you donate. That way, whenever you desire to donate to a specific cause or charity, you can simply log in to one account, name the beneficiary, and support their mission, with only a few clicks of a button. This streamlined approach is quick, convenient, and easy to manage.

Flexibility is another benefit. You can contribute a number of different assets to your DAF, such as real estate, stocks, cash, mutual funds, and other complex assets. This freedom is attractive to those desiring to support their favorite charities and to contribute a variety of assets.

Many donors opt for DAFs because they are relatively low-cost to open and operate, and they are also easy to establish. Sponsoring organizations often administer these accounts and it’s in their best interest to keep the process simple in order to encourage participation.

DAFs also provide a way for you to leave a legacy of generosity. Your gifts and your legacy planning will leave a lasting impact on charities that you care about, both in your lifetime and beyond.

The benefits of DAFs are plentiful, and the flexibility and freedom they provide makes them an increasingly attractive option to those desiring to be more involved in charitable giving and to support the causes closest to their heart.

Contact Ambassador Advisors today, if you have questions about a DAF. We can partner with you as you begin your journey towards a greater impact and a charitable legacy.

Any opinions expressed in this forum are not the opinion or view of American Portfolios Financial Services, Inc. (APFS) or American Portfolios Advisors, Inc.(APA) and have not been reviewed by the firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purposes of avoiding penalties that may be imposed by law. Each tax payer should seek tax, legal or accounting advice from a tax professional based on his/her individual circumstances.
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