Donor advised funds are an increasingly popular method for individuals and families to manage their charitable giving. In its simplest form, a donor advised fund is merely a separately named account at a public charitable organization, such as Jewish Community Foundation of Los Angeles. The account is opened with a written agreement between you and our organization that gives you (or other family members) the right to recommend that distributions, or grants, be made from the account to other charitable organizations.
How Does It Work?
Once you have created a donor advised fund, you can make contributions to your fund at any time. Your contributions are accepted and held by Jewish Community Foundation of Los Angeles, which invests them and provides a regular accounting to you. Then you can recommend that various amounts be distributed to charitable organizations of your choice. (In order for you to receive full charitable deductions for contributions to the donor advised fund, we must have full authority over the fund.)
You are entitled to an income tax charitable deduction for gifts to your donor advised fund. You receive no further tax advantage, however, when distributions are made from the fund to other charitable organizations.
Why Consider a Donor Advised Fund?
There are many reasons to consider a donor advised fund:
Convenience and timing-A donor advised fund allows you to consolidate your charitable giving for tax purposes. You can make one large contribution to your donor advised fund and take an income tax deduction for that gift in the year you make the gift. Then you can take your time recommending gifts to the charitable organizations you choose.
Simplicity-A donor advised fund could also allow you to centralize and streamline your giving. Having a donor advised fund allows you to effectively support a number of charitable organizations without having to retain records for a number of separate contributions. Many donor advised funds also offer helpful reporting and administrative services that can further simplify your giving.
Family philanthropy-Some donors use their donor advised fund as a substitute for a "family foundation." Families can build a tradition of giving and teach their children the values of philanthropy by involving family members in the decisions about which grants to recommend.
What Are Other Considerations?
Although community foundations were among the first public charitable organizations to offer donor advised funds, today more charitable organizations are willing to provide donor advised fund services. In choosing a donor advised fund, you also:
Choose the charitable organization carefully-When you make a gift to a donor advised fund you irrevocably give away your money or property. Make sure the organization you select is one that supports your values.
Understand the fund's policies and procedures-Minimum contributions and how grant recommendations are to be made, including amount and frequency, all vary depending upon the sponsoring organization.
Consider costs and investment-All donor advised funds charge administrative fees that can vary considerably. In addition, investment performance will vary from one donor advised fund to the next. Even though it is no longer your money, these factors can have a dramatic effect on the amount that will actually be distributable to a charitable organization.Please contact Development Office at 323-761-8704 or development@jewishfoundationla.org, for more information.
Contact Us
We would be happy to assist you in your charitable planning. Contact our Development Office at 323-761-8704 or development@jewishfoundationla.org to learn more about options that may work for you.