As the final months of the year draw near, many individuals are turning their attention to tax planning and charitable giving. Charitable donations are a good way to support meaningful causes and create a positive impact within communities. One effective method for managing charitable contributions is through a donor-advised fund, offering a range of benefits for both donors and the supported charitable organizations.

A donor-advised fund (DAF) serves as a type of charitable giving vehicle, allowing individuals to make contributions to a tax-exempt organization and subsequently recommend grants to qualified entities from the fund over time. Typically administered by a sponsoring organization, such as a community foundation or a financial institution, these funds are established with a minimum initial contribution.


  • Flexible giving option: Donors can make a contribution to the fund at any time and then recommend grants to qualified organizations over time.
  • Tax benefits: Contributions to the fund are tax-deductible in the year they are made, and the fund can grow tax-free over time.
  • Gifting Appreciated Assets: In most instances, you are able to gift appreciated assets such as stocks, bonds or real estate holdings to a DAF and deduct the full market value of the assets on your tax return which avoids the capital gains tax on the appreciation of those assets.
  • Anonymity: Donors can remain anonymous if they prefer.
  • Leave a legacy: Donors can establish a fund in their own name or in the name of a loved one, and then make recommendations for grants over time, even after they pass away.

When evaluating your options, a donor-advised fund can be a valuable tool for charitable giving. It provides a flexible giving option, significant tax benefits, the potential for anonymity, and the ability to create a lasting philanthropic legacy.

Presented by the Financial Planning Committee of Lake Street, an SEC Registered Investment Adviser

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