There are many individuals that will want to use their wealth to help various charities, schools and other non-profit organizations. For these individuals, the use of donor-advised funds can be an excellent option that will offer them some unique advantages.
Donor-Advised Funds Can Allow For More Rapid Donations To Worthy Causes
When a person is using a donor-advised fund, the money that they are wishing to use for charitable donations will be kept in a specialized fund. This can have a couple of different advantages. One of these can be that these funds will be invested using a conservative strategy so that the funds can grow over time, which will result in increasing their charitable giving capacity. Additionally, these funds can make it much easier to rapidly make a donation as it will spare individuals the need to transfer money from savings or other long-term accounts before they are able to issue the donation to the charity that they are wanting to help.
Individuals Can Enjoy Important Tax Advantages From The Use Of Donor-Advised Funds
In addition to the benefit of helping to make the world a better place, charitable giving can also assist individuals with managing their tax obligations as these donations may be fully deductible. Unfortunately, individuals may not always take advantage of these tax deductions due to failing to keep accurate records of their donations. Donor-advised fund accounts can help to streamline this process as it will make it much easier to review the donations that you have made as well as the type of asset that was used, the organization that received it and other pertinent information. Furthermore, these funds may also allow individuals to take advantage of tax deductions for these donations more quickly as they can qualify for these donations when they are adding funds to this account even if they may not be immediately issued to a charitable organization.
People Should Work With Firms That Specialize In Managing Donor-Advised Fund Accounts
While a donor-advised fund can allow individuals to have more control over the donations that they are issuing, it is a reality that these are fairly specialized accounts. As a result, many traditional financial service providers may not be familiar with the best practices or even rules that govern the management and use of these funds. If this is an option that you are wanting to use to manage your charitable donations, it is always best to seek out the services of a firm that has explicit experience with managing these accounts.