The benefits of using a donor advised fund

• Tax deduction when you need it—Gifts to a donor advised fund are generally immediately deductible. Cash gifts are deductible up to 50 percent of Adjusted Gross Income, and gifts of appreciated capital assets are deductible up to 30 percent of Adjusted Gross Income. Excess charitable contributions can be carried forward and deducted in future years up to five years. You can pre-fund your charitable gifts to a donor advised fund in order to get a tax deduction when you need it most.
• Ability to gift to ministries months or years later—You can take time, without feeling rushed, to carefully consider the ministries you want to support, when to support them, and how much support to give. You can give as the Lord leads you and not be subject to artificial time constraints or time pressures as imposed by tax deadlines.
• Tax-free charitable investment account—Interest, dividends, capital gains, and other forms of investment gain are tax free inside the donor advised fund. Short-term and long-term securities transactions within the account are not taxable events.
• Easy recordkeeping—If you write a lot of checks to charities or make charitable gifts using credit cards, it can be a hassle to keep track of all the canceled checks, receipts, and records and get them assembled and reconciled when tax time comes around. With a donor advised fund, much of the documentation and recordkeeping is done for you and is easy to retrieve and use for tax purposes.
• Ability to set recurring grant schedules—If you are providing monthly or quarterly support to a ministry or missionary, you can set up a recurring grant schedule with your donor advised fund to automatically send out the monthly or quarterly amounts.
• Often simpler and less expensive than a private foundation—You don't have to pay an attorney to set up a private foundation and obtain a favorable IRS tax exempt determination letter. You don't have to keep detailed records and pay an accountant to prepare an annual private foundation return. You are not subject to many of the complex rules, excise taxes, and potential pitfalls and penalties applicable to private foundations. Although a donor advised fund does have certain administrative costs, these are often much lower than the costs of maintaining a private foundation.
• Ability to name your fund—You can create a unique name and identity for your donor advised fund. This allows you to honor your family, stress the value of a particular verse of Scripture, or otherwise make a statement of values or purpose in the naming of the fund.
• Anonymous gifts—A donor advised fund allows you to give anonymously, whereas a personal check or private foundation grant leaves a trail that can be followed back to the donor.
• Create a lasting legacy—A donor advised fund can be used as a vehicle for giving after death. This is done by establishing guidelines and procedures that are to be followed in gifts made from the donor advised fund after the death of the donor.
• Allow flexible post-mortem estate planning—A donor advised fund can be used in coordination with qualified disclaimers to allow a surviving spouse, children, or other heirs to make a disclaimer that results in a deductible charitable gift to the donor advised fund. This can reduce or save on both estate taxes and income taxes that might otherwise be due on the assets gifted by disclaimer to the donor advised fund.