What are the tax benefits of using a donor-advised fund for charitable giving?
Tax Advantages, Cost Effectiveness
A DAF is a public charity, which allows donors receive the maximum tax deduction available at the time of their donation.
Because donors to a DAF are not required to pay the 1-2% excise tax on net investment earnings to which foundations are subject, the DAF is a more tax efficient choice.
For large donors, a DAF is a more cost effective choice than a private foundation, while providing a broad suite of services.
The cost of building and staffing a foundation is typically equal to between 2% to 4% of foundation assets annually.
NCE is able to accommodate the donation of complex securities in addition to simpler cash accounts.
NCE has the necessary experience, knowledge, and sophistication to accommodate complexity as well as very large pools of capital and assets. These can grow, tax-free.
See why these tax benefits are helping to make DAFs the new standard of giving…
Give on your schedule
Contribute cash, appreciated stocks, or complex or illiquid instruments and take the tax deduction in that year. You can take your time to decide which charities to give to and when all while your donation grows.
Manage your capital gains taxes
By contributing long-term capital gain investments, like appreciated stock, you eliminate the need to pay capital gain taxes on those investments. Instead, maximize your giving by donating them to your DAF.
Grow tax-free
Invest your DAF assets according to your goals and watch them grow tax-free, allowing you to donate even more to your charitable causes over time.
Eliminate paperwork
NCE handles all the administration and provides easy-to-use reporting for tax purposes – no more searching for multiple charitable receipts.
Increase effectiveness
By outsourcing administration to NCE, your charitable costs are reduced. By investing your DAF assets through NCE, your charitable assets are increased. In the end, this allows you to give more to the causes you care about.
Contributing to NCE, as opposed to a private foundation, is not only more cost effective but also makes you eligible for higher deduction limits, based on your adjusted gross income.