Donor-Advised Funding: Insights from a donor

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Donor-Advised Funding: Insights from a donor

By Princella Talley

Citizens’ Climate couldn’t do what we do without the generous financial support of foundations and individual donors. You’ve heard stories of families like the Saltonstalls, who gave a donation in honor of their beloved family member, Debby, after she died. “For me, this is all about participation. It’s not about a dollar amount,” Debby’s daughter Hillary said.

You’ve also heard about, and probably met, longtime CCLers like Davia Rivka, who joined forces with her sisters to become “Women Who Will,” (a donation level we now call “Climate Guardians”). “It delighted me to be able to give money to CCE,” Davia said. Her donation “felt like a small way to say thank you for being that light in the darkness.”

Maybe you’re ready to star in your own story of CCL giving. There are lots of ways to contribute, and one way is a donor-advised fund.

 A donor-advised fund (DAF) is a tax-advantaged way to give to Citizens’ Climate Education (CCE), the 501(c)(3) partner organization of Citizens’ Climate Lobby. If you’re able to donate a minimum of $25,000 to start a DAF, these funds are counted as a large tax-deductible gift for that tax year but can be distributed to CCE over multiple years. Based on your investment choices, your initial gift to a DAF can also grow over time to support our climate solutions work.

One of our donors who prefers donor-advised funding recently spoke with Princella Talley, Development Associate and Diversity Coordinator to explain why this type of gift was the best way for her to donate.

What benefits do you most enjoy about donor-advised funding that you think others should know about?

We were one of the Climate Guardian Donors, making a $10,000 donation both this year and last year. We looked into donor-advised funds because we knew we wanted to keep making large donations spread out over a few years. We decided to put a larger amount in one year and we got a major tax write-off that year. After that, we have been doling it out over a few years. In future years, we will take the standard deduction because that is what makes the most sense for us.

This is why we did it with the donor-advised fund.

In what situations should other donors consider setting up a donor-advised fund?

With the new tax situation, an individual automatically gets a $12,000 deduction and couples automatically get the $24,000. It means that you have to donate a lot of money in order to actually earn any additional tax benefits for your donations.  A donation to a DAF lets you take additional tax benefits all in one year, while allowing you to spread out the actual donations to your target charity over several years.

You can also put stock in this fund, and you won’t have to pay capital gains tax.  This is useful for stock that has appreciated over time.

What made you decide a donor-advised fund was right for you?

It’s all about the tax benefits. To put it into the donor-advised fund, there’s a minimum of $25,000 but the maximum is that you can’t put in more than 30% of what you earn of your adjusted gross income. This gives the parameters of what someone needs to donate and the limit.

We did it through Vanguard Charitable, but all types of wealth management companies have something like this set up.

In what situations would you say a donor-advised fund would be the best choice?

If you have stock that’s appreciated in value over time and want to avoid the taxes on it, then a donor-advised fund is a great vehicle. Also, a DAF can be the best choice if you are able to make this type of donation all at once, and then actual contributions to the organization can be spread out over the course of many years.

How would you describe the process of setting up a donor-advised fund?

Vanguard Charitable had very specific instructions. It took time but it was easy to do.

It’s a pretty straightforward way of donating and maximizing your tax deductions if you can put in $25,000. If people are looking to make major donations to Citizens’ Climate Education over time, it would be a good thing to do.

For more information about donor-advised funding or to set up a donor-advised fund, contact the development team at development@citizensclimate.org or ask your financial institution for more information.

Princella Talley is a Development Associate and Diversity Outreach Coordinator for Citizens’ Climate.

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