What if you could give generously to your favorite ministries and charities, pay less taxes, and do it all from an account that lets you invest in faith-based, biblically responsible investments?

You can! TA-DA! Get to know the faith-based Donor-Advised Fund!

What is a Donor-Advised Fund?

A Donor-advised Fund (DAF) is like an investment account that you use to give to your favorite ministries or charities.

How does a DAF work?

You contribute money, securities, or other assets to the DAF. You can invest the contributions, potentially growing (tax-free) the amount you can give. And you recommend grants from the account to IRS-qualified organizations that you care about.

Are DAF contributions eligible for a tax deduction?

Yes, since the DAF is itself a charitable organization, contributions to the DAF are generally eligible for a tax deduction just like other charities.

Are there other tax advantages of using a DAF?

Yes! If you donate long-term appreciated assets like securities directly to the DAF, you can get the following benefits:

• A tax deduction of the full fair-market value of the asset (up to 30% of your adjusted gross income), and
• Eliminate long-term capital gains taxes on the appreciated assets. That’s right, instead of giving that tax money to Uncle Sam you can give it to your favorite ministry!

Are there other benefits to a DAF?

Yes, another benefit is that it simplifies your recordkeeping. Instead of getting a year-end statement from each charity you donate to, if you do all your giving through the DAF, you will get one statement from the DAF.

Another major advantage of a DAF is that you receive an immediate tax deduction in the year cash, securities, etc. are gifted to the DAF even if grants aren’t made to charities in that year. This means that you could lump multiple years’ worth of gifts together in order to generate a higher deduction in that single year and make grants to charities over time.

Can I utilize faith-based investments in a DAF?

It depends. Many of the most well-known DAF providers do not offer faith-based investments. However, Beacon Wealth Consultants helps clients open DAFs that do feature our faith-based managed portfolios.

A Donor-advised Fund can be a wonderful tool to allow you to give generously in a tax-advantaged way.

If you’d like to know if a DAF is a good fit for your charitable goals, give us a call!