Planned Giving

There are many advantages to structuring a charitable giving plan for larger levels of giving that offer versatility and tax efficiency. By isolating part of your wealth that is vulnerable to taxes, you can manage these funds to directly offer social support in your community. These funds that were previously targeted for taxes can be considered your social capital. A few examples of charitable structures:

The information provided below is designed to introduce you to the basic structure, giving benefits and tax advantages of the various charitable giving vehicles available and suggest ways to integrate such plans into your income and estate planning. Working with a financial consultant directly can help you assess your current holdings, your immediate and long-term financial needs and objectives and your charitable goals. They can maximize the value of your assets, while giving you control of the use of your social capital.

Donor Advised Funds

A Donor Advised Fund (DAF) allows you to set up a philanthropic account by making one simple tax-deductible donation to the public charity offering the DAF. Often with as little as a $5,000 minimum amount to open, donors get many of the benefits of a private foundation without the legal complications or expense of set up. Assets are pooled and professionally invested so that they may appreciate (tax-free) to increase amounts available for giving. Some DAFs offer socially responsible and community development investment options that allows idle assets to create positive social impact. Then, the DAF makes grants to charitable recipients based upon donor recommendation. Some DAFs also provide access to expert analysis of non-profit charities that donors may use to inform their giving. Donors typically receive reports on the growth of the account and grants made. The initial contributions may be in the form of cash or appreciated stock. For people who want to give money now but want to wait to decide where it will be distributed, this may be a good tool to use.

Charitable Remainder Trust

A Charitable Remainder Trust is a contribution of cash, securities or real property made to an irrevocable trust. The trust pays you an income annually or more frequently for life. When the trust terminates, the assets are distributed to one or more charitable organizations of your choice. When the trust is initially created, you will obtain a current income tax deduction for the value of the charity's interest in the trust, even though the charity has to wait to receive the donation.

Charitable Lead Trust

A Charitable Lead Trust is established with a contribution of cash, securities or real property to a trustee. The trustee pays income to one or more charitable organizations for a number of years or for the life of the grantor. When the trust terminates, the trust assets are distributed to the grantor or other individuals. If the remaining assets are paid to the grantor's children or other chosen individual, the appreciation of the assets during the life of the trust is free of gift or estate taxes. In addition, a charitable gift-tax deduction is earned for the value of income paid to charity during the term of the trust.

Disclaimer: Information that we provide on our site is not intended to be tax, legal or accounting advice, and you should not rely upon it as such. You should consult a qualified tax advisor, attorney or accountant regarding the applicability of prevailing tax laws and regulations to your use of the Services and donations to charitable organizations.