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Beth A. Botti, CFP®, ChFC, CLU, CDFA™
Financial Consultant
California Insurance License #0G24537
612 Wheelers Farms Road, Milford, CT 06460
Phone: 203-877-6556 Ext. 169
Fax: 203-301-0736
Email: beth.botti@equitable.com
May/June 2022
Giving to Charity with a Donor-Advised Fund
A donor-advised fund (DAF) is a charitable investment account established to manage charitable contributions from many different donors. When you contribute to a DAF, you generally can choose the charities you want to support and the time frame for distributing the assets. You’re entitled to an immediate tax deduction for the full amount of your contribution in the year you donate the assets, even if the charity won’t receive them right away. You don’t have to be wealthy to contribute to a DAF. Some funds have relatively low contribution thresholds.
Making Contributions
You can contribute many kinds of assets to a DAF, including cash; stocks, bonds, and mutual funds; retirement account assets; cryptocurrency; life insurance; and other assets. You won’t pay capital gains on any appreciated assets you donate to the fund, and you’ll typically be entitled to a tax deduction based on the asset’s current value. Wealthy donors may be able to reduce the size of their estate for estate tax purposes by contributing to a DAF, because assets contributed to the fund aren’t subject to estate tax.
Getting Started
There are several types of sponsoring organizations for DAF: community and faith-based organizations; public foundations, including national and international charities and university and hospital foundations; and national DAF organizations. Your first step should be to identify the type of fund that aligns with your giving strategy.Although you can specify the organizations that you want to support, keep in mind that the fund makes the final decision on where your donations ultimately go.
A Word About Life Insurance
Gifting a life insurance policy that you no longer need to a DAF is one option to consider. The fund administrator then becomes the sole owner and beneficiary of the policy. A qualified appraiser will determine an accurate value for the deduction.When Will it End?
You can make a bequest in your will to the DAF sponsor or make the sponsor a beneficiary of assets. Many sponsoring organizations also enable you to create a succession plan for your DAF—allowing you to pass the remaining funds in your account on to your heirs or to your favorite charities.GE-4117253.1(1/22)(Exp.1/24)
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Duly registered and licensed financial professionals offer securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA,SIPC (Equitable Financial Advisors in MI & TN), offer investment advisory products and services through Equitable Advisors, LLC, an SEC-registered investment advisor, and offer annuity and insurance products through Equitable Network, LLC (Equitable Network Insurance Agency of Utah, LLC in UT; Equitable Network of Puerto Rico, Inc.). Equal Opportunity Employer - M/F/D/V. Equitable Advisors and its associates and affiliates do not provide tax, accounting, or legal advice or services. Representatives may transact business, which includes offering products and services and/or responding to inquiries, only in state(s) in which they are properly registered and/or licensed. Your connection to this website does not necessarily indicate that the sender is able to transact business in your state. The information in this website is not investment or securities advice and does not constitute an offer. For more information about Equitable Advisors, LLC you may visit https://equitable.com/crs to review the firm's Relationship Summary for Retail Investors and General Conflicts of Interest Disclosure.
GE-6572038.1 (4/24)(Exp. 4/26)
CFP®, and CERTIFIED FINANCIAL PLANNER™ are certification marks owned by the Certified Financial Planner Board of Standards, Inc. These marks are awarded to individuals who successfully complete the CFP Board's initial and ongoing certification requirements.
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