Donor Advised Funds

A donor-advised fund, or DAF, is like a charitable investment account for the sole purpose of supporting charitable organizations you care about.

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When you contribute cash, securities, or other assets to a donor-advised fund at a public charity, you are generally eligible to take an immediate tax deduction. Then those funds can be invested for tax-free growth, and you can recommend grants to virtually any IRS-qualified public charity.

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You want your charitable donations to be as effective as possible when you give. Donor-advised funds are the fastest-growing charitable giving vehicle in the United States because they are one of the easiest and most tax-advantageous ways to give to charity.

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What are the benefits of giving appreciated assets? By donating long-term appreciated securities or other non-publicly traded assets directly to a donor-advised fund, you may:

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• Eliminate capital gains taxes and the Medicare surtax, which combined could be up to 23.8%

• Maximize your support to your favorite charities

• Take an income tax deduction the amount of the full fair-market value if you itemize your deductions

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While you're deciding which charities to support, your donation can potentially grow, making available even more money for charities. Most sponsoring organizations have a variety of investment options from which you can recommend an investment strategy for your charitable dollars.

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Source: http://Fidelitycharitable.org