Donor Advised Funds

An increasing number of Baptist foundations are offering “donor advised funds” structured to enable individuals to make a donation of cash or appreciated stock to a fund bearing their name, by enjoying an immediate charitable deduction, and later request that the fund distribute gifts to the charities of their choice. The keyword is request, rather than require that the grants be made to the specific organizations.

What are the tax advantages for gifts made to a donor advised fund?

1. 100% income tax deduction is available.
2. Capital gains taxes are bypassed on long-term appreciated assets.
3. Assets are removed from the estate for inheritance tax purposes.

What happens to the donor advised fund at the death of the donor?

There are options that donors have:

1. A permanent endowment will begin with the earned income being distributed semiannually to the charity designated in writing.
2. The Donor Advised Fund will continue with the surviving spouse making distribution requests.
3. The Donor Advised Fund will continue with the surviving children making distribution requests.