Which is better, using appreciated securities or an IRA?
“To oversimplify the answer: The IRA approach is often the best for people who are taking mandatory withdrawals from their retirement accounts and are far short of clearing the standard deduction hurdle. The donor [advised] fund can do better for taxpayers who have highly appreciated securities they’d like to get rid of and are already near, or above, the hurdle.”
If you have clients interested in utilizing either of these strategies, the Foundation has ideas and solutions for them!
IRA Qualified Charitable Distribution (QCD)
One important thing to note is that QCDs can NOT be directed to a Donor Advised Fund.
Some families may wish to create a new fund – either a permanent endowment or something more flexible – to which they want to attach their family name. The Foundation has extensive experience creating custom funds for families. Using an IRA, a family may contribute to their fund over a number of years and set certain parameters for granting.
If this sounds like an interesting solution for a client or if you’d like to get more information about this type of scenario, please don’t hesitate to contact us.
You can also find out more about Family Endowments here.
Another (simpler) option for utilizing and IRA distribution is donating the QCD to existing fund(s) at the Foundation. This allows your client a very simple way to support organizations they love.
See our existing funds >
Donor Advised Fund (DAF)
If opening a Donor Advised Fund makes sense for your client, a DAF with the Foundation might be a good fit. Our “high-tech/high-touch” model allows donors to advise grants with ease while also giving them as much personalized attention as they want.
The Forbes article talks about “bunching” donations for multiple years into a Donor Advised Fund in order to maximize tax benefits. We created a simple example to explain how this concept works.