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A tax-effective way to consolidate, accrue, and grant assets to 501(c)(3) public charities.
Donor-advised funds may only issue grants to other 501(c)(3) public charities. The structure of this option allows charitable assets to be invested in the markets, providing the opportunity for tax-free growth. Minimum initial contributions vary by donor-advised fund. At Vanguard Charitable, the minimum initial contribution to open an account is $25,000.
Most individual donor-advised accounts are not subject to annual spending requirements, although many are required to make at least one grant every few years. Donor-advised funds can support a variety of legacy plans.
An effective option for individuals who:
Need an immediate tax deduction and the option to contribute all types of assets. Do not require complete control over assets or administrative details of giving.
|Tax efficacy||Full||Full deduction based on fair market value: 60% AGI for cash gifts, 30% for securities held more than one year.|
|Cost||Low||Expenses are minimal (typically less than 1%) and are used to cover organization's investment and administrative costs.|
|Control||Moderate||Recommend investments and grants; no direct control over assets.|
|Distribution to charity||Some restrictions||Generally support any 501(c)(3) public charity as long as you do not personally benefit.|
|Legacy options||Many||Create a personalized succession plan that passes/splits your account and/or gifts remaining assets to charity.|
|Recognition v. anonymity||Flexible||Choose when and how your name shows each time you recommend a grant.|