In Your Community

Many people feel that giving to the veterans or donating to the children’s hospital are personal decisions, not financial ones. However, your good deeds do affect your taxes and can influence your estate planning. When it comes to significant charitable giving, contributions to donor-advised funds qualify for the most favorable charitable deductions available, and as the donor, you can make an ongoing impact on your community.

Donor-advised funds are like charitable savings accounts. They are administered by a community foundation or third-party financial institution that manages charitable donations for a number of unrelated contributors. Accounts are tracked separately, and the costs are minimal. In Cobb County, we are fortunate to have the Cobb Community Foundation that sponsors more than 100 charitable funds.

“We are all about helping others help others. We don’t have boots on the ground, like the non-profits that we support have. We are all about bringing together resources with the needs of the community,” said Shari Martin, Executive Director of the Cobb Community Foundation. As a sponsor, the Cobb Community Foundation does the heavy lifting behind donor-advised funds. They take care of the bookkeeping, tax reporting, and ongoing investment decisions.

“You fill out a form; you write a check or transfer the assets; you take your deduction, and then you decide later where you want the money to go,” Martin explains. “We can literally set up and fund a donor-advised fund in a 60-minute window.”

Community foundations like The Cobb Community Foundation or the Community Foundation for Greater Atlanta are public charities, so when you contribute to them for the benefit of your donor-advised fund, you are allowed to deduct up to 50 percent of your adjusted gross income for cash gifts and 30 percent for donated appreciated securities in the year you make the donation.

“The beauty of a donor-advised fund is that you can make your gift when it is most convenient for you from either a tax perspective or a resource availability perspective, and then decide later the charitable organizations that you want to help,” said Martin.

This can be effective at year-end if you want to make a significant charitable gift that will help your tax situation, but you don’t have the time to research charitable organizations. You must set up the fund and transfer the assets by Fri., Dec. 29 to take the deductions for 2017. You can then take time to fully research non-profit organization(s) you want to donate to.

“Distributions can be to any charity. We have a strong expertise in Cobb County, with the charitable organizations that have boots on the ground here and the needs of those organizations, but distributions from donor-advised funds can be made to charitable organizations anywhere,” said Martin.

While the minimum to establish a donor-advised fund with the Cobb Community Foundation is $5,000, Martin suggests that donors intend to get their fund to $20,000 within three years, as their minimum annual fee is $300. Assets in your donor-advised fund grow tax free. You can continue to add to the fund over several years, and your fund can be set up to accept public contributions as well.

Part of comprehensive financial planning is helping investors achieve personal goals like meaningful charitable giving. The Cobb Community Foundation connects resources with needs to make a lasting impact on our community.

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