You are here

Give Yourself a (Tax) Break This Holiday

+ enlarge
 

My best friend Elaine is a busy mom, juggling two kids and a high profile job at a technology company. When she told me she wanted to make some charitable donations this holiday season, but just didn’t know how she would find the time to figure out exactly what nonprofit she wanted to give to, I told her I had the perfect solution: start a donor advised fund.


In simple terms, a donor advised fund allows you to set aside money now and get the tax benefit immediately. You can then decide at a later time which charities you actually want to give money to. With a donor advised fund (DAF) you’re able to make donations on a flexible schedule, build your charitable legacy, and increase your philanthropic funds for future grant making.


Many people aren’t familiar with donor advised funds because the typical DAF requires a minimum donation deposit of $10,000 to participate. The fund managers often charge you management fees, and the minimum grant you are allowed to make to a charity is $250.


But now there is a way virtually anyone can take advantage of the benefits of a DAF, but not have to worry about the restrictions. Bring Light, an online service to help donors find and donate to specific charitable projects, has partnered with the American Endowment Foundation, a leader in independent DAF management, to make donor advised funds much more accessible.


So how does it work? Let’s say Elaine has $400 she wants to set aside for philanthropy. By putting that $400 in a Bring Light Donor Account, she will receive the maximum tax benefit immediately (an acknowledgment of her donation which also serves as an official tax receipt of her contribution is emailed to her as soon as she makes a deposit). She can then decide any time—today, next month or next year—how much she wants to give to the charities on Bring Light. And any individual donation can be as small as $5!


Elaine may decide to give her entire $400 to one charitable project, or she may want to distribute it out in smaller chunks over a period of time. Either is okay, and with a Bring Light Donor Account she can take the time to find a specific project that speaks to her heart rather than making a quick decision on December 31st and not being really sure if her money is having the impact she wants.

Comments

Loading comments...