Always top of mind: The donor-advised fund’s broad appeal

Over the last few years, your clients have likely been hearing more and more about donor-advised funds. That is no accident; these vehicles are steadily gaining popularity. What your clients might not know, however, is that they can establish a donor-advised fund right here at the Community Foundation for Greater Atlanta; there is no need to go to a national financial institution to do so. Indeed, the act of establishing a donor-advised fund locally is itself an act of giving because the Community Foundation’s mission is to grow philanthropy in our region to improve the quality of life for everyone. 

Donor-advised funds are popular because they allow an individual to make a tax-deductible transfer that qualifies as a charitable donation, and then later recommend gifts to favorite charities from the fund when the time is right. A donor-advised fund operates a lot like a checking account (although it is so much more than that!) dedicated to charity, and it’s administered according to IRS guidelines that create both tax and charitable advantages.

How can you connect this trend to your work with your clients? Here are five pointers.

Talk the talk. Your clients are hearing about donor-advised funds. Make sure they are hearing about them from you! Whether your clients support a few charities or many charities each year, a donor-advised fund is a useful tool. Furthermore, the tax advantages set the donor-advised fund apart from other vehicles. Your clients will expect you to be knowledgeable and know who to call. Reach out to our team anytime! 

Know the options. Donor-advised funds are available through a variety of providers. community foundations, though, are uniquely positioned to offer donor-advised funds with the inherent tax and transactional benefits you and your clients expect, plus the added advantage of deep community knowledge and a well-connected team of experts to enrich your clients’ experience with philanthropy. Only a community foundation has the in-depth knowledge of what it really takes to make a difference in the community. Plus, a donor-advised fund at a community foundation opens the door to a wide range of options for involving the next generation and supporting the charities your client cares about the most.

Walk the walk. Consider establishing your own donor-advised fund at the Foundation. Clients want to work with well-rounded professionals who are connected to well-respected community institutions. Our team can work with you and your family to meet your own charitable giving objectives.

Understand the basic steps. It’s easy for a client to establish a donor-advised fund at the Foundation. After completing simple paperwork, your client will make a tax-deductible gift (of cash or, ideally, stock or other highly-appreciated assets) to the Foundation to fund the donor-advised fund. The funds can then be granted out over time to eligible charities at the client’s recommendation. Many clients find that a donor-advised fund operates almost identically to a private foundation, but without the sometimes hefty administrative overhead costs and burdensome restrictions. 

Supercharge both tax benefits and giving. Giving through a donor-advised fund at the Foundation may allow a client to tap a helpful technique called “bunching,” which maximizes the client’s itemized deductions for the tax year, while still ensuring that the client can give strategically over the next few years to achieve charitable goals and support favorite organizations when they need it the most. 

We look forward to working with you and your clients to structure donor-advised funds–or other types of funds–to meet clients’ charitable, financial, and estate planning goals. Reach out to our team anytime!