Could A Donor Advised Fund Be For You?
Making qualified charitable distributions (QCD) from your IRA is a great idea but it has limitations depending on your age. First, you need to be 70 1/2 years old or older to transfer funds. Second, the IRS limits distributions to $100,000 per year. Could there be a different way?
An alternative to the IRA QCD is the Donor Advised Fund (DAF). You can set up a DAF at any working age and begin directing gifts immediately. No need to wait until your 70s! A DAF can provide even greater tax advantages – depending on whether you contribute securities or cash, you may contribute up to 60% of adjusted gross income annually.
Nourish Pierce County is grateful that several of our donors have established DAFs and designate regular gifts to Nourish – these gifts help us support individuals and families who need food. You can create a DAF and recommend Nourish for a gift too!
So how does a DAF work? Once you establish a DAF at organizations like the Greater Tacoma Community Foundation or Fidelity Charitable, you may contribute cash (or securities) to the fund at any time. The contribution is irrevocable - the fund belongs to the DAF organization, but you get to make “grant” recommendations to the DAF holder. As long as your recommendation is to a 501 (c)(3) in good standing, your wishes are generally honored. Your gift receipt, for deduction purposes comes from the DAF holding organization.
Locally, the Greater Tacoma Community Foundation can be a good option; reach out to faservices@gtcf.org or call 253-383-5622.
Before making important financial decisions, please consult with your financial advisor, CPA, or tax attorney.
If you would like to talk to someone at Nourish about IRA qualified charitable distributions, donor advised funds, or other kids of planned gifts, please contact Marion Sharp, Development Director, at (253) 383-3164 x 109 or at marionsharp@nourishpc.org.
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