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We look forward to seeing you back on campus in the new year! Spread the word: 2025 Camp Carondelet Registration Opens on Monday, January 27 at 4 PM. View the Camp Carondelet webpage for more details.
A donor-advised fund (DAF) is a philanthropic financial vehicle by which donors contribute money to an investment fund managed by a sponsoring organization. Donors can contribute cash and a wide range of non-cash assets, including stocks, shares of mutual funds, publicly traded securities, private assets, and crypto.
Donors can then recommend grants be made to charities of their choice using money from the fund. Although “recommend” is the industry term for this process, it’s helpful to note that sponsoring organizations rarely decline a donor’s grant wishes.
The first step in setting up a donor-advised fund is deciding where to open it. Examples of places where a fund could be opened include foundations affiliated with financial institutions, or community and public foundations.
To open a donor-advised fund, a donor typically has to make a minimum contribution outlined by the foundation. The DAF’s sponsoring organization then actively manages and invests the funds, providing tax-free growth.
The donor receives an immediate tax deduction upon contributing to the fund. Later, when the donor decides to donate using the fund, they’ll recommend a charity to the sponsoring organization, which will then disburse the gift as a grant.
There are no limits to the contributions and grants that donors can make, and they can even set up recurring grants.
The donor names the fund and its advisers. A fund can also be opened by joint donors.
Individual retirement arrangement (IRA) owners age 70½ or over can transfer up to $100,000 to a charity tax-free each year.
These transfers, known as qualified charitable distributions or QCDs, offer eligible older Americans a great way to easily give to charity before the end of the year. And, for those who are at least 73 years old, QCDs count toward the IRA owner’s required minimum distribution (RMD) for the year.
Any IRA owner who wishes to make a QCD should contact their IRA trustee soon so the trustee will have time to complete the transaction before the end of the year.
Normally, distributions from a traditional IRA are taxable when received. With a QCD, however, these distributions become tax-free as long as they’re paid directly from the IRA to Carondelet.
QCDs must be made directly by the trustee of the IRA to the charity. An IRA distribution, such as an electronic payment made directly to the IRA owner, does not count as a QCD. Likewise, a check made payable to the IRA owner is not a QCD.
Each year, an IRA owner age 70½ or over when the distribution is made can exclude from gross income up to $105,000 of these QCDs. For a married couple, if both spouses are age 70½ or over when the distributions are made and both have IRAs, each spouse can exclude up to $105,000 for a total of up to $210,000 per year.
The QCD option is available regardless of whether an eligible IRA owner itemizes deductions on Schedule A. Transferred amounts are not taxable, and no deduction is available for the transfer.
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