Alternatives to a Foundation

Here we look at alternatives to starting a foundation:

# Donor Advised Funds

Donor advised funds make philanthropy administratively simpler if one of your goals is to lessen your day-to-day obligations.

In a donor advised fund, donors make an irrevocable contribution to a fund, claim a charitable deduction on their income tax returns, and then recommend how the money in the fund should be distributed to charity.

Public charities (e.g., community foundations) take the responsibility of managing such funds. Most accept gifts of cash, publicly traded stock, real estate, and other assets like closely held stock and life insurance.

The donated funds are invested in the financial market, so they can keep growing. You can take the tax deduction—typically up to 50 percent of your adjusted gross income for cash gifts and 30 percent for appreciated properties such as stock—for the tax year in which the donation was made.

# See also