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Bradley Impact Fund Blog

DAFs – A Smart Way for Conservative Donors to Manage Their Philanthropy

bradley-impact-fundRecently, this article caught my eye The Super-Rich Are Stockpiling Wealth in Black-Box Charities. Despite the pessimistic title, the author makes some very good points about the benefits of using a donor-advised fund, including tax advantages:

“DAFs offer advantages over private foundations. Donors who contribute privately held stock or real estate to their foundation must value it at cost basis -- likely to be low for depreciated property or businesses started in a garage. The income-tax deduction is capped at 20 percent of adjusted gross income (AGI), which can be carried forward five years.

No Capital Gains Tax

If instead that asset is contributed to a DAF, an appraiser determines its fair market value before it’s donated. That yields a bigger deduction, which can offset as much as 30 percent of AGI (and can also be carried forward five years). Since the DAF is a public charity, the donor pays no capital gains tax -- and neither does the DAF when it sells the asset.”

We couldn’t agree more.  And, when combined with the unique benefits of the Bradley Impact Fund donor-advised fund, it’s like having your own private foundation – COMPLETE WITH STAFF EXPERTISE – without the costs.  Plus you have more privacy.  Plus you have no administrative or legal fees.  Plus… well, you get the picture.

Naysayers claim it’s a “black box” for the “super rich” – we say it’s a smart way for conservative donors to manage their philanthropy.