Save Taxes and Change the World: Multiplying Your Impact by Giving Smarter
At Eaton-Cambridge we pride ourselves in providing Comprehensive, Holistic, and Consultative Wealth Management Advice. For many of our clients, supporting their favorite charities is an important financial goal and one wherein we’re well-equipped and experienced to help. The Typical Giver: If you’re like most people, a majority of your wealth is made up of non-cash assets like real estate, stocks, and business interest, yet you tend to give from your cash.
What if instead of writing checks, you could be giving from your non-cash assets?
A Smarter Way to Give: Although there are more than forty different charitable tools to help you give smarter, one of the most commonly used, most effective, and easily understood is the Donor Advised Fund (DAF). A Donor Advised Fund can best be likened to a personal foundation, less much of the administrative burden and cost. A community foundation like the Arizona Community Foundation, National Christian Foundation, or Jewish Community Foundation, for example, handles all the administration of your DAF, accepts donations, and makes distributions as you suggest.
They are not subject to the private foundation rules, and consequently, enjoy minimum limitations and maximum tax benefits. As long as your charitable requests are both legal and in keeping with the community foundation’s mission statement, they will routinely grant your wishes.
How it Works: 1. Instead of gifting cash to your favorite charity, you gift an appreciated asset to your Donor Advised Fund. Because your DAF is established under the umbrella of a community foundation which is a public charity, you get an immediate tax deduction for the full market value of the asset.
2. Upon receipt of the asset, and with your wishes in-mind, the community foundation that administers your DAF sells the asset. Because they’re a public charity, they do not pay capital gains tax on the sale of the asset.
3. Now that your asset has been liquidated, capital gain tax free, you get to direct those funds to your favorite charities, whenever you’re ready.
Instead of giving from your most limited asset, cash, a DAF allows you to give from your assets, and in doing so, give more, save taxes, and change the world.
If you have a Giving Heart, Appreciated Assets, and you want to explore if there’s a way to be “Giving Smarter”, we’d love to help.
Bob Korljan and Marc Giannone 480.385.7391
5090 N. 40th Street, Suite 205 | Phoenix, AZ 85018 | 480.385.7399