One Gift Satisfies All Charitable Giving Needs

How can a person write one check to charity covering all of their philanthropic commitments while that charitable investment earns tax-free growth through three investment options? Through a donor advised fund at Tampa Orlando Pinellas (TOP) Jewish Foundation, Inc.

“We write one check for the year and we’re done. It’s so much easier for us come tax time to get one receipt from the foundation rather than culling our check book to see how many donations were made throughout the year. A TOP donor advised fund is just an easier way for us to give charity with the added perk of tax-free investment growth,” explains Ed and Gale Milgrim.

Like the Milgrims, Marc and Laurie Smith recently opened and also have a donor advised fund at TOP Jewish Foundation and enjoy the investment options it offers.

“We like the investment choices and the flexibility of deciding how our charitable dollars might be invested. We can keep money in a money market fund, an all bonds fund or a balanced fund providing some stock market exposure,” explain the Smiths.

Ron and Mardi Shader established their donor advised fund through the donation of Israel Bonds. They’re thrilled that the bonds are helping Israel and now the same bonds are benefiting the local community by having TOP Jewish Foundation manage them.

“What’s even better than TOP Jewish Foundation holding the bonds, it’s that when the bonds mature we don’t have to handle all the paperwork to collect the face value of the bond. Better still, we can recommend the purchase of more Israel Bonds through our donor advised fund at TOP Jewish Foundation. The fund is convenient for us and offers all the flexibility we want,” explain the Shaders.

A donor advised philanthropic fund is a philanthropic investment creating a charitable entity allowing the donor and their family members to be active participants in the process of allocating dollars to meet charitable giving needs now and in the future. Grants from both income and principal can be made. Donors are eligible for an immediate tax deduction for all amounts contributed to the fund. The donor pays no tax on the income generated by the fund.

It’s important not to confuse charitable gift funds or donor advised philanthropic funds with funds designed to be given to friends and relatives such as American Century Giftrust or Royce Gift Shares. Investment in those funds essentially sets up a trust, where the money must remain in place for at least 10 years, at which point the recipient of the gift may then choose to keep it in the investment or withdraw.

Donor advised philanthropic funds are a cost-effective alternative to creating a private foundation or family foundation because they avoid the set-up and attorney fees associated private foundations. Donors can open a fund with stock, mutual fund shares or other appreciated securities, in addition to writing an outright check. Giving appreciated securities to create a fund avoids the payment of capital gains thus allowing for a larger gift. Depending on the securities involved in the donation, most transactions take a day or two.

Donors get the tax benefits from the giving now and then take time deciding where to distribute the money later. When is comes time for donations, virtually any charity approved by the Internal Revenue Service is eligible.

“We never have to deal with bills or pledge forms or even writing checks for the various charities we support. The donor advised fund at TOP Jewish Foundation gives us the freedom of time. We can make our distributions or additions from the fund at anytime. The Foundation writes and sends the checks to our favorite charities when we request it. Literally, it’s like a charitable savings account with full checking privileges. It just makes giving easier,” says Marc Smith.
A minimum of $10,000 is required to create a charitable gift fund or donor advised philanthropic fund at the Foundation. The investment is irrevocable and the funds do not allow the donor or someone related to the donor to receive any income from the money.

“Laurie and I feel we have a financial stake in the community through our philanthropic fund. We also feel we have a venue where we can instill our family’s values about giving to Jewish causes and the importance of tzedakah by involving our children in the fund. Down the line, our kids will have a greater voice in the family’s philanthropy through the fund. They even can even add to it to further their own charitable interests later in life. The philanthropic fund is really like creating a living family legacy that my family and I will be able to grow and nurture from one generation to the next,” comments Marc Smith.