By Mary M. Stanley, Central Indiana Community Foundation
My CICF charitable gift planning colleagues and I have prepared and presented this paper to various groups in the past and updated it this spring for a recent meeting of our Professional Advisor Leadership Council (PALC). The case studies in the last section were presented by PALC members who have utilized donor-advised funds, both current and future (as estate planning tools) to accomplish their client’s respective charitable goals. Highlights of the updated version include Treasury Notice 2017-73, providing among other things that pledges may now be paid from donor-advised funds. Although the recent Tax Cuts and Jobs Act did not specifically address donor-advised funds, it may make them attractive vehicles within which certain charitably inclined, but tax savvy clients may wish to “bunch” multiple years’ worth of charitable contributions (and then itemize that year), and then make grants to charities over the desired number of years (and take advantage of the increased standard deduction in those years).
Donor-advised funds can be useful for any number of reasons. According to a 2017 report by the National Philanthropic Trust, there were over $85 billion assets in all donor advised funds. Donor-advised funds now outnumber traditional private foundations by more than three to one.
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