By Sheryl Rowling
SAN DIEGO — Have I Got a Deal for You! Act Now!
It’s true that I’ve talked about donor advised funds before… but it’s worth repeating! And, if you act by the end of the year, you can get an extra bonus! A donor advised fund (DAF) is a tax-efficient and convenient way to stretch your charitable donation dollars.
Before you decide not to read further, please know that a DAF is not limited to the ultra-wealthy. You can open a fund for as little as $1,800 and grants from your fund can be as small as $100 each. If you tend to make significant charitable contributions each year, a DAF can give you better tax savings, boost your charitable dollars and provide more convenience and flexibility. Let me explain how a DAF works:
A DAF is like a “charitable IRA.” You get a tax deduction as soon as you contribute to the DAF. The DAF invests the money until you decide to make grants to the charities of your choice, and you don’t pay tax on growth while the funds are invested. By investing your charitable funds, you will actually have a larger pool from which to make donations. When you want to make a donation to a charity, you simply go online and designate your grant. DAF grants are tracked and can be viewed by you at any time. You don’t have to contribute cash – you can get greater tax benefits by contributing appreciated securities. You will get a deduction for the full value of the shares – and you won’t pay tax on the gain!
Since you receive a charitable deduction at the time you contribute to your DAF, if you establish and contribute to a DAF before year end, you will get a tax deduction in 2012 – no matter when you designate grants in the future.
A DAF can be established at the San Diego Jewish Community Foundation for as little as $1,800. I have been impressed with the Foundation’s excellent investment options, online access and unparalleled service. If you establish your DAF by year end, you can qualify for a “free” contribution to the Jewish charity of your choice of up to $1,000.
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For more information, please contact the Jewish Community Foundation at www.jcfsandiego.org or 858-279-2740.
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Rowling is a certified public accountant, personal finance specialist, and principal of Rowling & Associates. She may be contacted at sheryl.rowling@sdjewishworld.com