Many individuals and families give thought to year-end financial and tax planning issues at this time of year.
The Hudson Community Foundation recommends Donor Advised Funds (DAF) for families who value reducing taxes, creating a family legacy and charitable giving, says Foundation President Phil Tobin.
Donor Advised Funds provide flexibility, encourage family involvement, allow anonymity, and are easy and efficient.
“With a Donor Advised Fund, you can realize your tax benefits now, but decide which charities or causes to support later, at your convenience,” Tobin said. “While Congress ponders and talks about increasing taxes, reducing exemptions and limiting deductions, this simple, tax-smart and popular gifting vehicle offers an attractive solution for people who want to preserve the highest possible tax benefits available under the existing tax code. For many, separating tax deduction decisions from evaluating which charities to support takes the pressure off of the typical year-end charitable giving process. “
A DAF quarterly statement becomes a charitable journal, documenting the contributions added, and showing which charities are supported, when and with how much.
Donors can recommend their financial advisor to manage DAF investments, and keep those assets on their familiar custodial platform.
The DAF allows donors to control their level of recognition or privacy. There is no public disclosure to link a donor to the charities they support.
Donors can establish a DAF in their name with an initial contribution of $10,000. They select who can make grant recommendations and successor advisors. There is no legal cost.
“DAFs provide virtually all of the advantages of a private foundation, but the tax benefits are substantially better, administrative costs are lower, there are no taxes or minimum payout requirements, and anonymity is an option,” Tobin said.
I encourage you to talk with your family, and Advisor, about your charitable goals. Then call us at Hudson Community Foundation to see how we can help.
For more information, email philtobin@myHCF.org or email www.myHCF.org.