What is a donor advised fund?

Generally, a donor advised fund is a separately identified fund or account that is maintained and operated by a section 501 (c) (3) organization, which is called a sponsoring organization. Each account is composed of contributions made by individual donors. Once the donor makes the contribution, the organization has legal control over it.

Should you give to a donor-advised fund?

Giving to a donor-advised fund lets the donor take the tax deduction when it is advantageous. For example, a taxpayer can get a tax deduction for a contribution to a donor-advised fund and decide later which charities are the ultimate beneficiaries. Some donor-advised funds process gifts to foreign charities.

Should you donate appreciated assets to a donor-advised fund?

By donating appreciated assets to a donor-advised fund and then advising the fund to make donations to several charities, one can reap these tax advantages without the hassle and paperwork of transferring non-cash assets to several organizations.