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Options for Giving

Compare donor-advised funds to other options, such as establishing a private foundation or donating directly to a charity. The chart below may help you determine which approach is best suited to your philanthropic needs.

In many ways, donors to Franklin Charitable Giving Program enjoy the benefits of a private foundation without the cost and paperwork. Unlike a private foundation, a donor-advised fund is not encumbered with startup costs, administrative procedures or tax-related issues.

In addition, a donor-advised fund doesn't force a donor to choose a charity by year-end in order to receive tax deductions. A donor-advised fund allows an immediate tax benefit and gives the donor the ability to plan charitable giving over many years.

Compare Charitable Giving options

Below is a comparison of three popular charitable giving options, including the advantages and disadvantages of each.

Compare Giving Options
  Donor-Advised Fund Direct Donation to Charity Private Foundation
*Some charities cannot accept securities as a donation.
Immediate income tax deduction for amount of cash donation up to 50% of AGI, and up to 30% of AGI for securities Yes Yes No
Immediate income tax deduction for amount of cash donation up to 30% of AGI, and up to 20% of AGI for securities No No Yes
Capital gains tax for contributions of long-term appreciated assets No No No
Subject to 2% federal excise tax on annual investment income No No Yes
Contributions fully tax deductible in current year Yes Yes No
Start up costs No No Yes
Fees and expenses Low No Moderate to high
Anonymous donations allowed Yes Yes No
Legacy creation by naming successors Yes No Yes
Non-cash donations possible Yes Maybe* Yes
Limitations applied to tax deductions AGI AGI AGI

Important Legal Information

This comparison summarizes a few of the general tax implications related to donor-advised funds, private foundations and donations to charities, and should not be considered a complete analysis. Please consult your legal and tax advisors for more information about charitable giving and to determine which charitable giving option is best suited for you based on your personal circumstances.

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