Monday, September 27, 2021
Should You Be Utilizing Donor-Advised Funds in 2021? These Four Tax Benefits May Help Make Up Your Mind
Donor-advised funds, or “DAFs”, allow individuals and families to make tax-advantaged contributions to charitable organizations. When a DAF is established, a donor contributes assets to the fund (receiving an immediate tax-deduction) with the sole purpose of those assets later being donated to charitable organizations. Prior to their ultimate transfer from the DAF to a charity at the direction of the donor, assets in a DAF may continue to be invested, potentially magnifying the donor’s gifts. DAFs must be operated by 501(c)(3) organizations, or what the IRS deems to be “sponsoring organizations”.
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