Give Like a Billionaire

The donor receives three tax benefits. There is an immediate income tax deduction for the amount donated. Capital-gains taxes are avoided if the gift is appreciated property or investments, and an individual's estate is reduced by the amount donated.

The sponsoring organization does the paperwork. This is a big deal because foundations are complicated. The donor decides how assets and earnings will be distributed.

What's nice -- the donor can get the tax deduction today and can postpone the giving choice for years.

Investment choices vary among sponsoring organizations. Some may allow the donor's investment advisor to manage the money, while others require the donor to select from the investments offered through the sponsoring organization's program.

Charities and independent sponsors, like FJC (www.fjc.org) or American Endowment Foundation (www.aefonline.org), have long offered donor-advised funds, but annual expenses often exceed 1 percent and required contributions may be $25,000 or higher. And some may not allow the giving flexibility you'd like.

The few premium discount brokers and fund companies have made donor funds more consumer friendly. In October, Fidelity dropped their minimum contribution to $5,000, Schwab, T. Rowe Price and Vanguard offer similar programs but with a $10,000 minimum or more. Management fees run 0.6% and lower with accounts over $500,000.

After the initial contribution, you can contribute when you want to, in amounts as low as $1,000.