An October 4, 2018, article by Bloomberg noted that donor advised funds have tripled in growth to more than $85 billion in assets by year end 2016.

The rise of donor advised funds has been tied to a variety of reasons:  ease of use, tax efficiency and even as part of family legacy planning.  Ray Madoff, a Boston College Law School professor further notes that donor advised funds provide optimum tax benefits for complex assets.

Specifically, some donor advised funds are particularly adept at receiving gifts of real estate and even closely held business interests.  “The right structure in receiving closely held business gifts allows a donor to achieve maximum tax benefits—up to 30% of AGI,” says Evan Lange, Vice-President of Gift Planning at The Signatry.

While some charities are concerned that donor advised funds are not required to distribute 5% annually like private foundations, the reality of many faith-based donor advised fund entities is that they are distributing well over 30% annually.  Faith-based giving encourages a “give it now to accomplish the most now” mindset.

Part of The Signatry’s vision is to see the last checks needed to solve the world’s greatest problems signed. We believe the opportunity is now, and we encourage donors to have this mindset as they join an active and like-minded community.

One thing is for sure from these articles:  donor advised funds are here to stay.

Bill High

Bill is CEO & Founder of Vyne Legacy. He works with families to equip them with tools to build multigenerational legacies, and he teaches givers and financial advisers on transformational biblical generosity. He is the co-author with David Green of Giving It All Away and Getting It All Back Again: The Way of Living Generously.

Published October 19, 2018

Topics: Giving Strategies

Donor Advised FundsFoundationsGiving StrategiesThe Signatry