- Has a larger than average estate.
- Wants to time the gift to his or her tax situation.
- Desires to involve the family in gift-making decisions.
- Wants to give now, but not sure which charity he or she wants to benefit.
- Gift tax deduction based on full market value
- Separates timing of gift with delivery to charity
- Creates philanthropic training ground for the family
- Allows family involvement after your death
A donor advised fund for the Church and its institutions is administered by the Deseret Trust Company. You sign appropriate documents and then transfer cash or marketable securities to Deseret Trust Company. Each year, you and those family members you select advise Deseret Trust Company as to those charitable causes that you wish to receive income and any principal you desire to give. Your decisions may differ from year to year. You should be sure your financial and legal advisors are part of your gift strategy team. Use of a donor-advised fund is only effective as a part of an overall financial and estate plan. The professional staff at Philanthropies, a department of the Church of Jesus Christ of Latter-day Saints, can assist you and your advisors in participating in the donor-advised fund.
There are many advantages of a donor-advised fund:
- Flexibility in timing and where you give: you can make a gift to the Deseret Trust Company donor-advised fund and take an immediate charitable income tax deduction; you can choose later those charities that should receive gift distributions and how much they will receive.
- Tax benefits: tax benefits are more favorable than those available by using a private foundation.
- Less complex: you are not required to file separate tax returns or accountings; donor-advised funds are not subject to private foundation rules.
There are also some disadvantages of a donor-advised fund:
- Limited control: you do not enjoy the same control as you would with a private foundation.
- Reduced charitable emphasis: some for-profit institutions that offer donor-advised funds may care more about management of the assets than the gifts created.