Danielle Minson — How You Help
Giving Strategies: A Donor-Advised Fund is a Win-Win – Maximize Your Impact AND Minimize Your Tax Burden
A Giving Strategies post by Jewish Federation of Cincinnati
There’s an easy way to increase support of your favorite nonprofits, while also minimizing tax burden. It’s called a donor-advised fund and it’s an effective tool to enhance giving. They’ve been around since the 1930s, but thanks to recent tax law changes, they’ve been brought to the forefront an effective tool to itemize charitable deductions.
Opening and maintaining a donor-advised fund is easy. First, you make a charitable contribution of cash or assets and take an immediate tax deduction at the highest amount allowed by the IRS. Then you support your favorite charities in a time frame that works for you. Donor-advised funds are convenient because all of the paperwork, check writing, and record keeping is handled for you. Also, the contributions you make to these accounts are invested, completely tax-free, increasing your dollars to give away to charities.
Jewish Federation donor Mike Safdi recently increased his charitable impact thanks to his donor-advised fund. Jewish Federation of Cincinnati Senior Development Officer Mindy Garvey contacted Safdi to review his donor-advised fund agreement and its investment performance in the first half of 2019. Given the strong market, Safdi’s donor-advised fund had seen 11% increase in the balance due to interest, dividends, and net gains.
“I was really surprised when Mindy showed me how much money I had available to donate,” recalled Safdi. “She made it very simple. Seeing the numbers added to my balance at the end of each month really put it into perspective. I knew I wanted to make a difference.”
With the recent market volatility and possible correction, Garvey told Safdi the timing was perfect for him to put his increased balance towards a cause he supported. She worked with him to find a cause that he was passionate about, so they could strategize a purposeful and meaningful giving plan.
“A couple of things came together in that moment,” he said. “The market was on an upswing, and antisemitism seems to be on the rise. When Mindy was telling me about possible avenues of giving, I knew I wanted to help combat that.”
Garvey told Safdi about the new Jewish Community Relations Council initiative to combat antisemitism through a fellowship program designed to educate non-Jewish local leaders.
“I was astonished. It’s such an amazing opportunity to give, and it cost me nothing. When you see police officers in body armor holding automatic guns outside of synagogues and schools, how can you not do something to help those children, those families, regain a sense of normalcy?”Donor-advised funds are an easy way to do more with your donation and continue to support the community and causes of your choice. The Jewish Federation is pleased to offer donor-advised funds and welcomes you to contact Mindy Garvey, Senior Development Officer, Donor-Advised Funds, at email@example.com or call 513-985-1534 for additional information on how you can use these to your advantage.
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