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Here is how donor-advised funds work: Individuals or corporations set up accounts by making an irrevocable contribution to a fund and receive immediate tax deductions. If donors contribute appreciated stocks, they can avoid paying capital-gains tax on those stocks.
The money in the fund, which itself is structured as a 501(c)3 public charity, is then invested by the sponsoring mutual-fund or brokerage firm for a fee. Donations from the fund are disbursed to charitable organizations over a period of months or years based on the recommendations from the donors. Once their accounts are set up, donors also can make additional contributions to the fund.
The donor-advised funds are a much simpler and less expensive way for donors to get involved in organized charitable giving than establishing a private foundation or charitable trust.
11/06/2001 The Wall Street Journal Page C19 (Copyright (c) 2001, Dow Jones & Company, Inc.)
If you want more information about Donor Advised Giving Funds please call us at 781-239-1187 or 800-327-7003 or e-mail pamboston@fwg.com.
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