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.
|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 InformationThis 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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