Donor-Advised Funds – Good Solution

Amy Jordan |

Donor-Advised Funds – Good Solution

Giving appreciated stock to charitable organizations is certainly a highly effective tax strategy. During years when highly appreciated stock is in short supply, however, implementing this strategy may be easier said than done.

This is when donor-advised funds come in especially useful. Now is the time to discuss charitable giving with those clients who regularly added to their donor-advised funds throughout the market’s long bull run. If these clients intend to ride out today’s market conditions in their personal portfolios, this year’s bear market does not mean the clients’ year-end charitable giving has to take a hit. These clients can use their donor-advised funds to support their favorite organizations, sometimes even at levels consistent with prior years.

It is also a good time for clients to evaluate the asset allocation in their donor-advised funds. For some clients, this may be a year to consider contributing cash to a donor-advised fund instead of donating highly appreciated stock (which has been the go-to gift for so many of the last several years). Gifts of cash could reduce the burden on a client’s personal stock positions that may have fallen in value dramatically, giving these positions more time to recover value and, at some point in the future, be contributed to a donor-advised fund at a higher value (thereby resulting in a higher tax deduction for the client).

Consider encouraging your clients who’ve not yet established donor-advised funds at Hudson Community Foundation to consider doing so now. Not only does a donor-advised fund help organize charitable giving, but over the long term it can also protect a client’s ability to support favorite charitable organizations even when market conditions are rough.

Hudson Community Foundation is always happy to help your clients maximize both the philanthropic and financial elements of their charitable giving strategies. We look forward to hearing from you.

With a fund at Hudson Community Foundation (HCF), advisors can manage the charitable assets on your preferred platform at any amount. Assets stay under your management. You can provide your clients with the consistent investment advice they expect. We are your partner in charitable giving!

The team at HCF is a resource as you serve your philanthropic clients. We understand the charitable side and are happy to serve as a secondary source as you manage the primary relationship with your clients. This blog is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.