Giving Funds

Donor-Advised Funds

A Giving Fund (Donor-Advised Fund) is created for the purpose of managing your charitable donations. Think of it as a charitable savings account: you put money in, receive an immediate tax benefit, and then decide over time which charities you want to support.

How It Works: The Three-Step Process


  1. Contribute: You make an irrevocable contribution of personal assets (cash, stocks, crypto, or appreciated non-cash assets like business interests and real estate) to your giving fund.
  2. Grow: While you decide which charities to support, your contribution can be invested, allowing the funds to potentially grow tax-free.
  3. Give: You give grants from the fund to your favorite charities at any time.


Key Benefits for Donors

1. Immediate Tax Advantages

  • Income Tax Deduction: You receive an immediate income tax deduction the year you make the contribution, even if you don't distribute the money to a charity until years later.
  • Capital Gains Avoidance: By donating appreciated assets (like stocks held for more than a year) directly to a Giving Fund, you eliminate the capital gains tax you would have paid if you sold the assets yourself.
  • Estate Tax Reduction: Giving Fund assets are generally excluded from your taxable estate.


2. Simplified Record Keeping

  • Instead of tracking down receipts from all of your charities at tax time, you only need one receipt from your Giving Fund sponsor for all your annual contributions.


3. Teaching Generosity

One way a Giving Fund can be used is to help teach future generations to be generous.  There are two main ways to do this:


  • A family can contribute to a Giving Fund and then hold a family meeting each year to discuss where the giving should go in the coming year.  If the kids/grandkids can be a part of that discussion and see that money has been set aside to give back to the Lord, they can begin to learn the importance of giving and generosity.
  • A Giving Fund will allow you to establish successor trustees.  You can put instructions into your estate plan that at your death, money is to be put into a Giving Fund, and you can name your children or grandchildren the trustee or successor trustee of the fund.  It will then be their job to take a part of the inheritance and give it away.  They can't keep it for themselves, but they can be a part of giving even after you're gone.


A Few Giving Fund Administrators:


Talk with your investment advisor

If you have an investment advisor, start with them. They likely have low-cost or no-cost options. If you do not have an advisor, we can recommend one.