Giving Compass’ Take:
• Chuck Cavanaugh describes three ways for donors to maximize charitable giving by directing dollars toward private foundations, donor-advised funds, or utilizing charitable remainder trusts.
• Do you use any of these giving vehicles for your preferred philanthropic giving method? How do you decide?
To maximize your approach to philanthropic giving, here are three advanced planning strategies for charitable giving that you can start to consider during the holiday season that will also help you maximize your tax savings and meet estate-planning needs.
- Private Foundations Private foundations make up a significant portion of philanthropic giving in the United States while providing a way to leave a lasting legacy.
- Donor-Advised Funds Donor Advised Funds (DAFs) are becoming increasingly popular due to their simplicity and flexibility. In sharp contrast to a private foundation, DAFs typically require a smaller minimum contribution, in the range of $5,000 to $25,000. DAFs also allow you to make an irrevocable charitable contribution without immediately designating a charity, while you still receive an immediate tax deduction for the contribution.
- Charitable Remainder Trusts Charitable Remainder Trusts (CRTs) are another popular charitable vehicle for those interested in philanthropy. The strategy behind a CRT is that you leave an asset or money to a charity but receive the income that the asset generates while you’re still living. You set up a time span for the trust — usually your lifetime, or a specified number of years — and the charity receives the value of the trust at the end of the designated time span.
Read the full article about maximizing your charitable giving by Chuck Cavanaugh at Kiplinger.