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What are Donor Advised Funds?

On today's episode of the podcast, the team is joined by guests Jordan Sute, CPA from Sute CPAs and Barbara Garner from Cobb Community Foundation to talk about donor advised funds. They go over how state tax credits can also help the community at the same time. If you want to learn more about tax credits that help the community as well as other tax strategies, click here to download our FREE guide on "10 Important Things to Know About Taxes."

Listen on Apple Podcasts or through YouTube:

SUMMARY:

What is a donor advised fund?

Donor advised funds are a great tax savings tool for state and federal taxes. Essentially, it is you creating a marriage between a mutual fund and a private foundation. Put cash or appreciated stock into a fund that is managed by a community foundation or a brokerage for an immediate deduction on your state tax return. Then you get to direct those funds wherever and whenever you want. It is a great way to lower your income tax rate especially in those higher income years.

How to Donate

You can donate with cash, appreciated stock, and hard assets. You get the value of what it is today and get an immediate tax reduction. It goes into the fund and then you can give it to any IRS recognized charity. Some examples of these would include hospitals, community organizations, and churches.

Cobb Community Foundation

Cobb Community Foundation is a grant making community organization. They are a 501c3 that is focused on the quality of life of those who live in Cobb County. They provide tools to help those in the community while providing a way that those in the community can give back. The donor can choose what fund in their organization (they hold 150 funds) they’d like to send their cash to. Essentially, they are the broker of the community foundation.

How to Utilize a Donor Advised Fund

Donors can set up the funds, get their immediate tax deduction, and choose how the funds are invested. Then, it sits until they are ready to send it off. They can go to an online portal and choose from a list of nonprofits. If the organization you want to give to is not in the list, you can just let them know and they will add them.

Can you gift a donor advised fund?

Some people set up Donor Advised Funds for their children and have their kids choose where they would like to give during the Christmas Season. It can be a great way to teach your kids to give back to the community.

Success Stories

There are a ton of success stories. Specifically, during the beginning of Covid, the Cobb Community Foundation was able to build a great team of partnerships that could provide food to the community in Cobb County. 1.9 million pounds of food was shipped to this community throughout the pandemic.

TIMESTAMPS:

1:33 What is a Donor Advised Fund?

2:06 How to Donate

10:02 Cobb Community Foundation

10:37 How to Administer a Donor Advised Fund

16:04 Can you gift a donor advised fund?

18:42 Success Stories

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Wiser Wealth Management, Inc. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

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