Can Donor-Advised Funds Simplify Your Year-End Giving Strategy?

Year-end giving with Donor-Advised Funds
(Left to right) Vice President of Development & Stewardship Brian Zumbano, estate planning attorney Nancy Spector and philanthropist Bill Geppert discussed how donor-advised funds can help maximize the impact of charitable giving in 2018.

For philanthropists, the end of the calendar year is generally the time to increase your nonprofit support and make your largest charitable contributions to receive optimal tax benefits.

In 2017, of the $410 billion Americans gave to U.S. nonprofits, roughly 30 percent of all charitable contributions occurred in the month of December, and 10 percent of all giving came in the last three days of the year.

Over the last several years, donor-advised funds have become one of the most used tools in philanthropy to maximize the impact of charitable dollars at year-end.

A donor-advised fund is a philanthropic giving vehicle administered by a charitable sponsor, such as a community foundation (like The San Diego Foundation) or commercial institution. Donors establish donor-advised funds with a charitable sponsor, fund the account with an irrevocable, tax-deductible contribution and receive an immediate tax deduction.

Then, they decide how to grant the money over time.

That final point, in particular, is why San Diegans who earned a sizeable annual income or sold a business within the last 12 months turn to donor-advised funds at year’s end. Many want to be charitable, but don’t know immediately where they want to grant their money.

“Clients ask me ‘What can I do fast before the end of the year?’ to get a charitable deduction,” said estate planning attorney Nancy Spector. “I tell them to open a donor-advised fund… and then next year they can decide where they want to give. That’s powerful.”

Another contributing factor to the lure of donor-advised funds at year-end is that these philanthropic vehicles accept both cash and non-cash gifts, including:

  • Stocks (publicly traded, private and restricted)
  • Bonds
  • Mutual Funds
  • LLP Shares
  • Private Equity Stakes
  • Partnership Interests
  • Pre-IPO shares
  • Life Insurance
  • Trusts
  • Real Estate

By donating appreciated securities to a donor-advised fund, you avoid paying up to 20% in capital gains tax on the sale of non-cash assets.

“When my wife and I make our year-end decision in giving appreciated stock or an asset of some sort, giving to our donor-advised fund leverages our gift so we can make even more impact than we would have otherwise,” said Bill Geppert, fundholder at The San Diego Foundation for more than 15 years. “As donors, we’ve really found it’s just so simple.”

Nancy and Bill joined us for a Facebook Live conversation to discuss how donor-advised funds can help San Diegans maximize the impact of their charitable giving before 2018 ends. Watch the video below to learn from our local experts.

Contact our Development & Stewardship Team today to learn if donor-advised funds are the best option for your year-end giving strategy.

Contact our Development & Stewardship Team today!

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