Top of Mind….Donor Advised Funds
Over the last few years, you have likely heard more and more about donor-advised funds (DAF). That is no accident; these vehicles are steadily gaining popularity. Did you know that you can establish a donor-advised fund right here at Hudson Community Foundation (HCF)? There is no need to go to a national financial institution. Establishing a DAF locally at HCF is itself an act of giving because the community foundation’s mission is to grow philanthropy in our region to improve the quality of life for everyone. All standard fees stay locally supporting a nonprofit.
Donor-advised funds are popular because they allow an individual to make a tax-deductible transfer that qualifies as a charitable donation, and then later recommend gifts to favorite charities from the fund when the time is right. A donor-advised fund operates a lot like a checking account (although it is so much more than that!) dedicated to charity, and it’s administered according to IRS guidelines that create both tax and charitable advantages.
For Professional Advisors: How can you connect this trend to your work with your clients? See below:
Talk: Your clients are hearing about donor-advised funds. Make sure they are hearing about them from you! Whether your clients support a few charities or many charities each year, a DAF is a useful tool. Furthermore, the tax advantages set a DAF apart from other vehicles. Reach out to our team anytime!
Know the options: Donor-advised funds are available through a variety of providers. HCF is uniquely positioned to offer donor-advised funds with the inherent tax and transactional benefits you and your clients expect, plus the added advantage of deep community knowledge and a well-connected team of experts to enrich your clients' experience with philanthropy. A donor-advised fund at HCF opens the door to a wide range of options for involving the next generation and supporting the charities your client cares about the most. With HCF, you manage the charitable assets on your preferred investment platform at any amount - you provide your client the consistent investment advice they expect.
Open Your Own DAF: Consider establishing your own donor-advised fund at the community foundation. Clients want to work with well-rounded professionals who are connected to well-respected community institutions. The team at HCF would be honored to work with you and your family to meet your own charitable giving objectives.
Understand the basic steps. It’s easy for a client to establish a donor-advised fund at Hudson Community Foundation. After completing simple paperwork, your client will make a tax-deductible gift (of cash or, ideally, stock or other highly-appreciated assets) to HCF to fund the DAF. The funds can then be granted out over time to eligible charities at the client’s recommendation. Many clients find that a donor-advised fund operates almost identically to a private foundation, but without the typical hefty administrative overhead costs and burdensome restrictions.
Supercharge both tax benefits and giving. Giving through a donor-advised fund at Hudson Community Foundation may allow a client to use a helpful technique called “bunching,” which maximizes the client’s itemized deductions for the tax year, while still ensuring that the client can give strategically over the next few years to achieve charitable goals and support favorite organizations when they need it the most.
We look forward to working with you and your clients to structure donor-advised funds–or other types of funds–to meet clients’ charitable, financial, and estate planning goals. Reach out to our team anytime!
Read more about Donors Guide to Donor Advised Funds.
With a fund at Hudson Community Foundation (HCF), advisors can manage the charitable assets on their 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.