Schwab Charitable, one of the nation’s leading national donor-advised fund organizations, is reminding advisors and investors that year-end deadlines for charitable giving are fast approaching and that there are multiple ways, from cash contributions to the donation of appreciated assets, that individuals can realize tax benefits from charitable giving this year.
The traditional giving season is well underway and Schwab Charitable is already seeing a strong uptick in activity. Contribution levels have increased 40 percent and new accounts are up 48 percent over the same period last year.
“Individuals and their advisors increasingly understand the value and ease of use of donor-advised funds to empower their charitable giving and reduce their tax liabilities,” said Kim Laughton, president, Schwab Charitable. “We have seen a 54% jump in calls this season from both existing and potentially new clients who want to know more about the ways in which they can use a donor-advised fund in their financial planning, especially given the uncertain tax landscape ahead.”
A donor-advised fund allows investors - either directly or with the help of an investment advisor - to contribute cash or appreciated assets to a charitable account to realize the greatest possible tax benefits and to then support charities of their choice over time. Serving a wide range of philanthropic investors, Schwab Charitable’s account sizes range from $5,000 to more than $500 million.Appreciated Assets Can Be Among the Most Tax-Advantaged Items With only a few weeks left in the year, investors and advisors are finalizing their year-end tax strategies. As a part of this planning, they are taking a look at appreciated stocks, mutual funds and other assets in their portfolios. Appreciated assets can be the most tax-advantaged items to contribute to charity because they give investors a current year tax deduction and also allow them to avoid payment of capital gains taxes on their sale. Giving appreciated assets to a donor-advised fund is often much easier than distributing directly to a variety of charities, who can find these gifts administratively costly and burdensome and would prefer to receive a simple check from the donor-advised fund account.