The Gift Of Flexibility
If you’re looking to give back and maximize tax benefits, but also want some flexibility in where and when your donations go, a Donor-Advised Fund (DAF) account might be the perfect tool for you. Think of it as a charitable giving account with a little more control and a few perks.
Imagine this: you contribute to a DAF, get an immediate tax deduction, and then…you have options! You don’t have to decide right away which charities will receive the funds. Instead, you can let the money sit, grow, and give yourself time to choose the causes you’re most passionate about supporting. When you’re ready, you can “recommend” a grant, and the DAF will send it to the charity of your choice.
Why People (and Elmwood) Love DAFs
- Tax Perks Upfront: You get the tax deduction right away. You can front load your gifts in high income tax years with no rush on deciding which charity; you make that call whenever you’re ready.
- Freedom to Spread Out Your Giving: With a DAF, you don’t need to figure out all your donations in one go. You could donate this year for tax benefits, then make grants to charities over the next few years as you find causes that resonate.
- Invest and Grow Your Gift: You can invest the money in the DAF, potentially growing your gift before it even reaches the charities. This way, your one-time donation could end up having a much bigger impact.
- One-Stop Charitable Giving: No more keeping up with a dozen donation receipts. With a DAF, all your grants are in one place, which makes keeping track easy and hassle-free.
- Donate using Strategic Investments Instead of Cash: By using highly appreciated assets, you avoid paying capital gains, in addition to making your charitable contribution. (Elmwood can help!)
One thing to note- you can’t take it back. Once you contribute, that money is in the charitable world for good. You can’t reclaim it later, so be sure you’re ready for that long-term commitment to giving.
If you’re interested in opening a Donor Advised Fund or have any questions on the details, please respond and let us know! The earlier we get started the easier it will be to make sure we make your donation before the 12/31 deadline.
Whether you’re looking to support a favorite cause, honor a family legacy, or reduce taxes, a Donor-Advised is more than just a giving account; it’s a way to maximize your impact and keep giving meaningful and simple.
DISCLAIMER: Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this newsletter (article), will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this (article) serves as the receipt of, or as a substitute for, personalized investment advice from Elmwood Wealth Management. A copy of our current written disclosure statement discussing our advisory services and fees is available for review upon request.