Donor-Advised Funds
A Donor-Advised Fund is a private fund administered by a third party to manage charitable donations for an organization, family, or individual. This can be a low-cost and convenient charitable giving fund for all your charitable giving.
A Donor-Advised Fund Sponsoring Organization (such as National Christian Foundation) manages the account; then you as the donor recommends how to invest the assets and where to donate them. Technically, once assets are deposited into a donor-advised fund, the sponsoring organization has legal control over them. But as long as you choose a charity that's recognized by the IRS as a U.S. charitable organization, the sponsoring organization will usually use your charities of choice.
WHY DONATE THROUGH A DONOR-ADVISED FUND ?
In addition to providing financial support to charities, donor-advised funds can provide more immediate income tax deductions for donors, as well as potentially reduce capital gains taxes and estate taxes. Possible benefits of a donor-advised fund include:
You realize tax benefits for the year of the donation. You can claim a tax deduction in the year you contribute assets to the donor-advised fund rather than in the year the contribution goes to the charity.
For example, if you typically donate $3,000 a month to charity ($36,000 a year), you could essentially prepay for, say, five years’ worth of donations by putting $180,000 in a donor-advised fund now. The donor-advised fund would use the money to disburse $3,000 a month to the charity as usual, but you would get a $180,000 tax deduction this year instead of a $36,000 deduction every year for the next five years. Getting a giant deduction in one year could be worth more than a smaller $36,000 annual deduction.
Lower capital gains taxes - You won’t pay capital gains taxes on assets you put in a donor-advised fund, and if you donate assets that are worth more than what you paid for them, you typically can deduct the current market value of the asset rather than what you originally paid for the asset.
Reduced estate tax - Few people have to pay estate taxes (in 2023, these taxes apply only to those with estates of more than $12.92 million). If you’re one of those few, putting money in a donor-advised fund can reduce the size of your taxable estate. How? Assets you put into a donor-advised fund aren’t subject to estate taxes, so they don’t count toward your total estate value.
A legacy of giving - when estate planning, you can make a bequest in your will so any remaining assets in your donor-advised fund are donated to your charities of choice after you die. There’s also the option to pass the assets to heirs so they can take the philanthropy mantle and give grants to charities they want to support.
Anonymity - some individuals gravitate toward donor-advised funds because of the anonymity these funds provide. You can choose to withhold your identity and gift grants anonymously if you don’t want to be solicited for future donations or don’t want your donations to become public knowledge.
You can establish your fund with Oasis Sanctuaries with no minimal initial contribution, and contribute different kinds of assets to a donor-advised fund, such as stock, money in IRAs or 401(k)s, life insurance or other appreciated assets.
HOW OASIS SANCTUARIES INC BENEFITS :
Your gifts given through a Donor Advised Funs comes to Oasis Sanctuaries Inc. gets money into our ministry quickly and efficiently. You may designate this money for a specific program or instruct us to use it towards the greatest need. Whichever way you choose, you will be confident that you are investing in the continuation of the important work of our nonprofit.
HOW TO BEGIN :
Step 1. Compare Donor-Advised Fund Sponsoring Organizations
There are many different kinds of sponsoring organizations. Commercial donor-advised funds, for example, are run by nonprofit arms of national financial-services firms. A popular option is National Christian Foundation
Step 2. Contribute Cash or Other Assets to the Donor-Advised Fund
You can put in cash, stocks or other investments, such as cryptocurrency or even your ownership in a private business. Note: Contributions are irrevocable, meaning that once you contribute the assets, you can’t get them out again.
Step 3 : Itemize Your Taxes to Get the Tax Break
That means filling out Schedule A when you do your taxes and making sure that your itemized deductions exceed the standard deduction to get the most bang for your donated bucks. You receive your tax break in the year you contribute to your donor-advised fund.
In case you’re curious about limitations on deductions, you can deduct up to 60% of your adjusted gross income for cash contributions. If you’re contributing securities or appreciating assets to your donor-advised fund, you can deduct up to 30% of your AGI.
Step 4 : Help Your Donation Grow
Although the sponsoring organization controls the money in the donor-advised fund and the investment options you choose from, you get to recommend which investments to use.
The assets in a donor-advised fund are then invested and can appreciate tax-free until you’re ready to donate them to your charity of choice. Unlike private funds, there is no mandatory distribution date for individual donors, meaning the funds could sit in the donor-advised fund for years before charities receive them. However, most providers, such as Vanguard, Schwab and Fidelity, have policies that require you to disburse funds to charity regularly.
What are the advantages of waiting to disburse funds to charities? Some people prefer to wait for the investments to mature so they can give a larger amount. Others want the tax deduction immediately but need time to select charities they want to give to.
Step 5 : Pick Charities to Support
That’s the goal of the entire process. You can support pretty much any IRS-qualified public charity. Typically, the entity that sponsors the donor-advised fund is responsible for checking out charities to ensure that the money goes to legit ones.
We invite you and / or your financial advisor or attorney to discuss this giving option with a representative at Oasis Sanctuaries. Please call to request a confidential conversation : (805) 709-5193 or email our Philanthropy Team. Here’s the Tax ID Number for Oasis Sanctuaries Inc.: 87-2644308.
Step 6 : Let Charities Know of Donation
Please notify us of your intentions so we can discuss options with you and plan accordingly to honor your desires for the use of the funding that is donated.
If you have any questions, email our Philanthropy Team.
*This information is provided without obligation as a service and does not constitute tax or legal advice. We encourage you to consult your tax advisor, lawyer or other financial advisor before making any decisions about contributions from your estate or assets.