3 Interesting Facts About Donor-Advised Funds

Since donor-advised funds (DAF) are charitable investment accounts, the only reason for opening such an account is to make contributions to charity initiatives your interests align with. Whether you contribute resources in form of cash or securities, you're assured that the contributions will be channeled to a public charity. This is a genius way to give back to society and propel initiatives that are close to your heart.  Continue reading to learn the advantages of opening a charitable investment account.

Ensure You're Not Sidetracked

Since the world is so fast-paced, you may forget to start investing in yourself if you don't have a suitable investment account. Opening a charitable investment account ensures you're not sidetracked from your long-term financial goal. Having an active donor-advised fund is a constant reminder to remit the assets you have already allocated as a donation to a charity program you support. Your donor-advised fund sponsor will then channel the contribution to a charity of your choosing. Handing over your charitable contributions to a transparent financial organization allows you to stay committed to your long-term financial plan.

Make Tax-Deductible Donations

A great incentive to donate to charities is getting tax deductions on every donation you make. Opening a charitable investment account allows you to enjoy instant tax deductions on stocks and private assets. Every time you need immediate tax deductions, you can contribute to your charitable investment account and decide later where the sponsor of the fund should channel your donations to.

Since making any donation to your donor-advised fund is an irrevocable commitment to charity, your eligibility for tax deductibles cannot be revoked under any circumstances. This also allows you to rest easy knowing your account sponsor isn't allowed to use the assets for anything other than grantmaking. What's more, your donations get to grow tax-free, making your charitable contributions as efficient and beneficial as possible.

Offer Long-term Charity Support

Having a charitable investment account will motivate you to make contributions to charities when you have surplus resources. The account allows you to channel your donations to virtually any public charity that strikes a chord with you. 

The more assets you contribute to your charitable investment account, the more tax deductions you get to enjoy on your private investments. Owning a donor-advised fund allows you to kill two birds with one stone; enjoy significant tax exemption while using your privilege for good.

In case you have been looking for supporting public charities, you should consider opening a donor-advised fund.

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