Tax-Smart Gifting that Maximizes Impact

Charitable gifting is a large part of many of our clients’ current or future plans. But to have the most impact, it’s important to give wisely. In many cases, the most efficient way to meet gifting goals is through a Donor Advised Fund. We have the ability to partner with a variety of low-cost custodians of the client’s choice, such as Schwab or Fidelity, that operate as independent 501(c)(3) public charities, to manage investments and facilitate gifting to the chosen charities.

Donor Advised Funds at a Glance

• Donors contribute cash, appreciated assets, or investments that have been held for a year or more without paying capital gains taxes
• Donors are allowed to take a charitable deduction in year of gift (allowing for carry-overs to future tax years)

• The gifted assets may then be managed by LK&A while in the Donor Advised Fund to maximize long-term growth or structured to provide payouts over a period of time
• An ideal strategy to reallocate and diversify large, low-tax-basis positions out of a taxable portfolio without realizing taxable gains
• Because a Donor Advised Fund is part of a public charity, capital gains and most income derived from the investments while in the fund will incur no tax liability

• There is no required timetable for you to make donations to your chosen charities.
• You may choose which charities to donate at any time, not being constrained to those charities of interest at time of gift to fund
• Charities place a high value on sustained support through recurring donations, but sometimes a large, single gift is needed to help an organization meet a critical goal. You can structure your giving to make gifts only when your charities are in need.

LK&A does not provide specific individualized legal or tax advice. Please consult a qualified legal or tax advisor where such advice is necessary or appropriate.