A donor-advised fund is a separately identified fund or account that is managed and operated by section 501(c)3 of the internal revenue code. Every account features individual contributions from individual donors.
Here’s an overview of what you should know about them and how they could benefit your alumni association.
Why do people use these funds?
With the tax law changes that were passed and put into law several years ago, there are many more people using donor-advised funds to lump deductions. One can make charitable contributions for a single year and still deduct them from itemized taxes. This also allows them to make charitable contributions over a period of time and have those funds invested over that period of time.
Individuals will also supplement gifts to their private foundations, which are subject to a 30 percent limit. Donor-advised funds, meanwhile, are subject to a 50 percent limit. This allows people with philanthropic interests to increase the amount of their giving in a high-income tax year.
Finally, the simplicity of these funds makes them much easier than working with a private foundation.
Who is in charge of these funds?
Donor-advised funds still go back to the individual who creates them. The holder and manager of the funds acts at the direction of the donor, so it always comes back to the individual that created the fund and who will direct future contributions to the organizations it chooses to support.
Using these funds for your organization
Organizations can gain support through donor-advised funds, but you do have to convince individual donors of the value and quality of your programming. If you are able to do this, they can support your activities by direct contribution. Many of these organizations are automated, so they can easily make monthly or annual contributions (or whatever period they choose).
There are hundreds of organizations that now support donor-advised funds. It’s as easy as an individual writing a check, but instead of writing a check, they request that a check come out of their donor-advised funds.
To learn more about the best ways you can use these funds as vehicles for donating to your alumni association, contact us at Alumni Nations!
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