Part of a Philanthropy A-Z series
Often thought of as charitable giving bank accounts, donor-advised funds allow philanthropists to channel resources through their local community foundation, financial institution, or identity-based giving program like CAAP to causes that matter most to them. A donor-advised fund requires care and cultivation to flourish – just like any garden plant requires water and sunlight. The donor establishes a fund with a set amount of money (or stocks, or property), receiving a tax-deduction at that time. Then, at any point in the future, the donor recommends certain amounts be directed to 501©3 organizations of the donor’s choice. The money directed to a nonprofit from a donor-advised fund is called a grant.
But before that happens, community foundation donor officers perform due diligence on the recommended nonprofit organizations to make sure that they are in compliance with government regulations. With our plant analogy, you might think of this as weeding and pruning the garden.
While many gardeners grow flowers and plants purely for pleasure, reaping a garden’s vegetable harvest is also a great reason to cultivate plant life. In the context of a donor-advised fund, the garden harvest comes in the form of tax benefits – as well as the knowledge that, like a green-thumb sows and grows, you are helping to nurture programs and projects that make a difference for our planet and its people.
One of our current fund holders, Mona Sahouri, likes the ease and peace of mind that comes with housing her and her husband Saed’s fund at the Center for Arab American Philanthropy (CAAP):
Our CAAP fund organizes our giving and helps us to strategically plan our giving trends for the future years. It gives us an idea of just how much we give and to which causes we tend to give more – not to mention the tax benefits as we often used to make donations and forgot to report them.
Additionally, by giving through their fund at CAAP, Mona and Saed are leveraging their charitable giving with others to tell a powerful story of Arab American philanthropy in this country.
The specifics for setting up donor-advised funds vary depending on the institution that houses the fund. We encourage you to learn more about the many benefits of setting up a donor-advised fund at CAAP by visiting our website. Keeping your donor-advised garden well stocked will allow your charitable impact – and legacy – to grow, sometimes forever.
Photo courtesy Arwyn J.M.