Donor can control foundation funds – Davie County Enterprise Record


This is the 11th in a series of articles
about Davie
Community foundation and its work in the county.

The Davie Community Foundation offers fund options to help community members make charitable donations.
One of the most popular types of funds, the Donor Advised Fund, can offer tax advantages to the donor and can help organize their charitable giving.
The foundation holds 62 different donor-advised funds valued at nearly $ 4 million.
Funds advised by donors can be opened to the foundation with a donation of $ 5,000. The fund can be formed in one of two ways:
1. Endowment Fund – a permanent fund that is invested forever with a percentage of income spent each year.
2. Non-endowed fund – the entire fund balance is available for granting.
Once a donor advised fund is opened, the donor becomes a partner of the foundation and can recommend grants to charities at any time. The Foundation Board has the final approval of all grants awarded by the Foundation.
Each year, the donor receives a statement summarizing the donations made to the fund and the resulting grants. Since the start of the year, holders of the Donor Advised Fund have recommended more than 130 grants totaling more than $ 214,000.
Benefits to the donor include:
• The donor receives a tax deduction when making a donation to the fund. Money from the fund can be used at any time for grant making.
• If the donation to the fund is made with appreciated securities, the donor benefits from a tax deduction corresponding to the fair market value of the share when it is transferred to the foundation. Since the foundation is the one that sells the shares, the donor avoids capital gains tax.
A simple example: John Donor bought stocks 10 years ago for $ 1,000. John decides to donate the stock to the foundation. At the time of donation, the stock is valued at $ 10,000. John receives a tax deduction for the entire $ 10,000, even though he only paid $ 1,000 for the share. John does not pay capital gains tax on the $ 9,000 gain.
• If a donor plans to use the standard deduction instead of itemizing it, they may consider consolidating their charitable contributions every other year. If you make a larger donation one year and no donation the following year, this will allow you to itemize the deductions one year and take the standard deduction the following year.
• If you don’t want to give a large amount of money to charity all at once, you can donate it to a fund recommended by the foundation’s donors and then recommend grants to charity over time.
• Funds advised by donors can also be useful when selling a business. The donor should work closely with their advisors to determine the dollar amount they should donate to the Foundation in the year the business is sold. The donation can be made in valued inventory to maximize its effect on taxes. Either way, the donation will help offset the taxes generated by the sale.
“Our donors have many uses for their Donor Advised Funds, but in all cases we do our best to provide the personalized service they need and appreciate,” said Jane Simpson, President- general manager of the foundation.
To learn more, contact Simpson at (336) 753-6903 or [email protected] or visit

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