Charitable giving: Donor-Advised Funds
If you are like me, then you receive lots of invitations to donate to your favorite charities. There are natural disaster funds, religious contributions, education, health, and many other non-profit groups that look to individuals for funding. According to the Giving USA Foundation, individuals gave an estimated $211.77 billion in 2010, a 2.7% increase from 2009. Since this is an important topic to many people, it is good to be informed on the most effective ways to give to your favorite charities.
One common way to contribute to charities is to give cash. This is simple, and charities can easily handle the different contribution levels. The downside is that you may have to sell an asset (stock, bond, mutual fund) in order to free up the cash you intend to donate. Usually, when you sell something, there are tax consequences to doing so. For example, if you had a stock worth $10,000 and the basis was $5,000, you would create a tax consequence by selling and would likely have less than the full $10,000 to give to the charity. (more…)
