What is a donor-advised fund and is it right for you?

In a Patriot Ledger article, it aims to focus on describing a donor-advised fund and if it right for you, your charitable contribution approach and your tax situation.

Lauren Gates, writer at Patriot Ledger, explains a donor-advised fund (DAF) as like a charitable investment account, for the main purpose of supporting charitable organizations that you care about.

DAF enables donors to make charitable contributions, get a tax deduction, and recommend grants from fund over time. DAF allows a donor to accumulate funds in a donor-advised fund for the long term without making any distributions to a qualified charity.

If the donor intends to contribute funds to charity but doesn’t want the charity to receive the funds in one year, contributions can be made to a DAF to claim a tax deduction in the year of the contribution, and the DAF can then distribute the funds to the charity when the donor is ready for the funds to be disbursed.

Gates advises to consult a financial or tax advisor to help you determine the amount of the contribution for your personal tax situation.

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