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The team from Charity Navigator, the nation's largest independent charity evaluator and leading donor advocate, shares their thoughts on emerging nonprofit-sector issues and offers tips to better inform your intelligent giving decisions.

Friday, December 15, 2017

Alternative Giving Tips: DAF’s, Community Foundations, Stocks and Giving Circles


When most people think about donating to a charity, they usually just consider writing a check to a charity they regularly support or one that has contacted them. This is a great way to take care of your charitable giving, provided you do your research and consult Charity Navigator beforehand! But there are alternative ways to donate, and today, on the Charity Navigator blog, we're going to walk you through some different options that you might consider before making your next donation.
One option you might choose is a Donor Advised Fund, or “DAF” for short. A DAF is a charitable vehicle
that allows donors to create an account and receive an immediate tax deduction. The difference between
DAF and a typical donation is you can "grant" the money to specific charities over time, through a
recommendation. While the money is in your account and you're determining which charities to support,
the funds you've allocated can possibly increase based on how they're being invested. Another benefit
with DAF’s is that you can ultimately support many charities but you only have to manage one tax receipt
for the gift to the original DAF.
Another choice to consider is supporting a Community Foundation, which is a public 501(c)(3). Community
Foundations usually have a mission to help those in their local community. Community Foundations
distribute the funds given to them to their larger community, ds givenultimately making the final decision
on where the money is distributed. Community Foundations are able to assess the needs of their local
communities, and also are able to make funding decisions accordingly.

A third option to consider is donating stocks. When a donor has stock that has appreciated in value,
they can donate to avoid the capital gains taxes that they would have incurred otherwise.
And there are also groups called Giving Circles. Just like many people get together for all sorts of reasons
(book clubs, fantasy sports, etc.) Giving Circles are a group of people who pool their funds together to
make charitable donations. Giving Circles are sometimes made up of small informal groups or larger
groups with formal structures and rules in place. Formal ones can even become a 501(C)(3) themselves
if they so choose. After the giving decision is made by the group, each individual donates will get their
own receipt and can take their deduction as they normally would when donating. Giving Circles allow
individuals to become more involved with their philanthropic activities. Pooling know-how and resources
often will lead to larger impact.

If you're wondering how the latest tax proposals might affect your giving decisions, take a look at Charity
Navigator's last blog post.

Written by Matt Viola, Vice President of Program Analyst Operations at Charity Navigator.

1 comment:

older person said...

Why is there no mention of direct donations from the Required Minimum Distribution from IRA accounts for people 70.5 years old? Since these older people, with IRAs, are required to withdraw a certain percentage from their IRAs annually, donations given directly from this RMD will not be considered taxed as income. It amazes me how few older people are aware of this and how few websites of charitable organizations mention it!