• Charitable Planning & Private FoundationsDonor Advised Funds

    Donor Advised Funds are public charities, or subsidiaries of public charities, that give donors the ability to make a large gift to the charity and then “advise” without the legal right to direct how and when to make (later) specific charitable requests. 


    In recent years, Donor Advised Funds have become popular for several reasons: 

    1. They offer the Donor the ability to make a large gift immediately for tax purposes and decide later to make grants to specific charities that will actually spend the money.
    2. Gifts to Donor Advised Funds qualify as gifts to Public Charities for tax deduction purposes. Depending upon the specifics of the Donor’s situation, this advantage may be worth anywhere from zero and a large number.
    3. It is simple. A Donor simply writes a check or sends money similar to when opening a mutual fund account and may sign an agreement covering the way in which the Donor will advise on when, how much, and where future grants to charities are to be made. No further paperwork is required for the Donor because the Donor Advised Fund takes care of it all.

    As a Donor Advised Fund is treated as a Public Charity for purposes of income-tax deduction limitations, it can offer some benefits for Donors who want to give more than 30% of their income to charity each year or to donate appreciated property or other publicly traded stock.

    Donor Advised Funds spare Donors some paperwork, because the Funds handle the compliance work. But with professional foundation management, Donors to Private Foundations are also spared paperwork. For charitable commitments of $500,000 or greater, the Donor can have all of the benefits of a Private Foundation and none of the headaches for about the same cost.

    In spite of, or perhaps because of these benefits, some Donors are confused about what a Donor Advised Fund actually is.

    Some Donor Advised Funds encourage this confusion by calling a Donor’s account, a “Foundation”. A Donor Advised Fund is itself a charity. When you give money to a Donor Advised Fund you are giving away your money – irrevocably. The charity that receives it – – The Donor Advised Fund – – then owns the money.

    A Private Foundation in contrast gives the Donor full legal control over the money.

    While most Donor Advised Funds, follow the Donor’s advice most of the time, this could certainly change.

    Many people have put money into a Donor Advised Fund and found that the sponsors make it difficult to distribute money to unpopular causes, or causes that they themselves have not deemed to be important. 

    To view articles related to Donor Advised Funds in our Article Library Click Here

    If you or a loved one needs help with a situation involving one of these areas, please contact Thomas N. Silverman, P.A. at 561.775.7500 (24 hours) or info@FloridaProbateCounsel.com.

    Thank you for contacting our firm. One of our associates will be in contact with you shortly. If the matter is urgent, please call our office directly at 561.775.7500 to speak with an attorney.