The Fountain Hills Community Foundation wrapped up a successful Surprise Gifting Season with funds provided by local donors who have recently taken advantage of a new charitable program that provides tax deductions at tax time.
The fun began on November 26th when Helen Whatmough, Mary Molnar and Mark Dalton dropped in to gift $1,000 to Rescue Pals, a local animal rescue. The donors each utilized a new Donor Advised Fund program offered by the Fountain Hills Community Foundation.
Following the surprise gift to Rescue Pals, Lee Holmes and Helen Whatmough surprised the Fountain Hills Toymakers on Dec 9 with gifts of $250 each, followed by a stop at the Marine Corp League where Roger and Deborah Saylor ($300) and Lee Holmes ($250) delivered a surprise contribution. Dori Wittrig, on behalf of the Sonoran Lifestyle Team ($400) along with Roger and Deborah Saylor ($400), wrapped up the first annual event with a donation to Reigning Grace Ranch on Dec 10.
“Utilizing a Donor-Advised Fund—or DAF—is like “super-charging” your charitable-giving strategy,” Bill Pape, a Director for the Fountain Hills Community Foundation, said. “It’s a way for individuals to employ a mechanism that allows for a significant tax deduction now, with the ability to make valuable donations to their favorite nonprofit organizations now or in future years.”
HOW IT WORKS: The donor establishes a Donor Advised Fund with the Fountain Hills Community Foundation in their name or family name. The funds contributed to that fund are considered by the IRS to be a charitable contribution, giving donors a tax deduction for the amount contributed. The donor can then recommend contributions from the DAF to various charities over time and can also contribute additional monies to the DAF. The donor may also recommend how the money is invested with numerous investment funds available, ranging from very conservative to more aggressive.
The contributions are irrevocable, which is why the donor can obtain the tax benefit immediately, even though the amount isn’t necessarily being disbursed immediately. As with donating appreciated securities directly to a charity, investors can direct highly appreciated assets into the DAF, thereby removing the tax burden associated with the embedded capital gain from their portfolios.
Investors who find themselves in a particularly high-income tax year may benefit from utilizing a DAF; it enables them to obtain the tax break in that one year but allows the money to be donated to a charity over a longer period of months or years. A DAF also works well for someone who wants to make a charitable contribution and allow family members to contribute to the fund in the future.
Contact the Fountain Hills Community Foundation at (480) 744-9055 or Info@FountainHillsGives.com, or call your financial planner, attorney, or tax advisor for more information.