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Donor-advised funds have become a universally popular tool in charitable giving – and for good reason. The funds are a smart choice for philanthropic investments, and with careful planning, can bring you great tax savings, flexibility and the benefit of centralizing your charitable dollars in one convenient account.

Some simple strategies can help you fully realize the impact of your fund and boost the satisfaction you get from giving:

Choose the Right Partner

You have options in whom you choose to set up and manage your donor advised fund. Be sure to think through what is most important to you in your giving and make sure your partner has community insight and financial expertise. A partner, such as a community foundation, can customize a giving plan that meets your needs and helps you make your greatest charitable impact.

Involve Your Family

You may choose to involve your family by designating members as fund advisers or successor advisers. Some donors have even opened up separate donor-advised funds for each of their children. Many donors like the idea of teaching their children how to make grantmaking decisions and experience firsthand how their philanthropic choices can transform the community.

Maximize Flexibility

Timing: When you make a contribution to a donor-advised fund, you can claim an immediate income tax deduction and decide later which charities to support.

Assets: The most popular types of contributions to donor advised funds are cash and appreciated securities. If you choose to gift appreciated securities to your fund, you can claim a deduction without paying taxes on appreciation.

Convert your private foundation: If you created a family foundation and now find that circumstances are different, perhaps as a result of a changing family, geographic dispersion, or updated charitable priorities and estate plans, you can easily convert your private foundation into a donor-advised fund and continue to support your favorite nonprofits.

Gifts from others: Not only can you add to your fund any time with a variety of assets, but others can too. Many fund holders share news of their fund with friends and family, encouraging donations in memory of a loved one, or in place of wedding, anniversary, retirement, birthday or bar and bat mitzvah gifts.

Connect to the Community

Inform your giving by connecting with other donors and the many nonprofits in Cleveland and beyond doing meaningful work worthy of your support. Establishing a relationship with staff and board members at your local community foundation and area nonprofits can be beneficial.

Leave a Permanent Legacy

As you review your estate planning options, consider using your donor-advised fund to leave a lasting legacy. You can provide instructions to create a permanent fund to support either specific nonprofits or broader areas of interest in perpetuity.

Kaye Ridolfi is senior vice president of advancement at Cleveland Foundation in Cleveland.


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