Donor Advised Funds

The purpose of the Donor Advised Fund program is to create an opportunity for people to give back to their communities in an informed and active way. Our goal is to make participation in the work of the Community Foundation as rewarding as possible.

A Donor Advised Fund is a charitable fund established by a donor (an individual, family or business) into which they contribute cash or assets, receive a tax deduction and continue to have the opportunity to be involved in its charitable use. It offers active participation in the grant process by allowing you to recommend the grant recipients. It affords all the advantages of a private foundation with greater tax benefits and none of the administrative tasks. A Donor Advised Fund can be created at The Community Foundation for Greater Rome in a variety of ways. It’s a perfect vehicle for those who wish to participate actively in grantmaking and retain philanthropic flexibility.

The staff at the Community Foundation is dedicated to meeting the diverse needs and interests of our donor. We attempt to personalize our donor services in a variety of ways. But most of all, we want to get to know your charitable interests so that we are better able to assist you in meeting your charitable giving goals.

We strive to assist donors in maximizing the impact of their charitable gifts and hope that you make full use of the service we offer.

How can a Donor Advised Fund help you?

Mr. A was in his last year of work before retirement. He anticipated reduced income and a lower tax liability when his working career ended. While still working, he donated enough to his donor advised fund (DAF) to cover his charitable giving for his first year of retirement. He received the tax deduction when his income was higher and advised the DAF to distribute his gifts the next year.

Mr. and Mrs. B both make significant salaries and contribute generously to a variety of non- profits. They plan to retire in ten years, but they want to maintain their generosity after they no longer work. Mr. and Mrs. B donate liberally to a DAF, receiving a deduction in the year of the contribution. After retirement, they will advise their DAF to distribute funds to their favorite causes. They receive tax deductions in years with higher income and build a DAF which can continue their generosity after they no longer receive salaries.

Mrs. C purchased shares in ABC Corp. in 1971. Recently, ABC received a cash offer for the purchase of the company, which would trigger a significant capital gain for Mrs. C. She donated 300 shares of ABC to a DAF. She advised the fund to make equal distributions to her church in the five subsequent years. Mrs. C avoided the capital gains on the 300 shares and received a tax deduction for an amount equal to the fair market value of the 300 shares on the date she donated the stock. The tax deduction negated a large portion of her tax liability for her capital gains on the remaining shares she tendered.

These scenarios represent tax strategies appropriate for the individuals mentioned. They do not represent tax advice. Please consult your personal tax professional before taking any action with a donor advised fund. Contributions to a donor advised fund are tax deductible (up to IRS limits) in the year they are made. Distributions from DAF’s do not receive additional tax benefits.