Perspective

Donor-advised funds are the linchpin of local charitable giving

As Americans worried about how they would feed their families, care for their children, and stay healthy in the face of Covid-19, they found an important source of support – their neighbors.

In cities and towns across the country, those who have means have stepped up to help their neighbors in need in the face of the Covid-19 pandemic.

And they have used a popular – and widely misunderstood – tool to help: donor-advised funds (DAFs).

Donor-advised funds are charitable giving vehicles that make it easy for individuals and families to contribute to charity. Once donors contribute cash, stock, or other property into a DAF, they are legally required to give the money to support registered nonprofits. In return, they receive a tax deduction and receive advisory privileges on how and when the funds invested in a DAF are granted to charities.

Read the full story at BloombergTax.com.

Photo: iStock

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