Last week, I wrote a “P.S.” to my Shabbat message and I want to reiterate it here as my main message.
The tax plan has been sent to the President for his signature and he will sign it into law, according to news reports, in early January or possibly before. Whatever your politics and your feelings about this major overhaul of the tax code, there may be opportunities for some community members to take advantage of in this current tax year.
As you may have seen on multiple news shows and in the written media (the New York Times, CNN, the Wall Street Journal, etc), it may benefit some to make charitable donations in the current tax year because of the doubling of the standard deduction. Annual campaign donors may want to “prepay” their next year’s contribution. What might be a great opportunity for some is establishing or adding additional funding to a Donor Advised Fund (DAF), also known as a Philanthropic Fund.
What is a DAF? Here’s what the IRS’s website states:
Generally, a donor advised fund is a separately identified fund or account that is maintained and operated by a section 501(c)(3) organization, which is called a sponsoring organization. Each account is composed of contributions made by individual donors. Once the donor makes the contribution, the organization has legal control over it. However, the donor, or the donor’s representative, retains advisory privileges with respect to the distribution of funds and the investment of assets in the account.
This allows a donor to make a donation in the current year but have the ability to help guide where contributions go in the future. Our Federation Foundation’s DAF’s are able to contribute to every Jewish organization and synagogue as well as other “non-Jewish” nonprofits both locally and nationally.
A DAF can be especially useful if individuals have appreciated stocks or mutual funds. When those assets are transferred to a nonprofit like the Federation’s Jewish Community Foundation, the donor receives a deduction on the value of the stock, and the Federation, as a nonprofit, does not pay capital gains taxes when the shares are sold.
The number of new DAF’s that have been established already in the Federation Foundation in the last week has been impressive. You still have time if you and your financial advisor think it may make sense for you (we always recommend that you speak with your own advisor/accountant). Our staff will be here through the end of the year to help.
I know that I typically write about the impact of your philanthropic dollars through the Federation. We hope that shining a light on this potential opportunity may help you to be even more supportive in the future.
An early Shabbat Shalom! Looking forward to seeing the more than 1,200 volunteers signed up for the Jewish Federation of Greater Pittsburgh’s Mitzvah Day on Sunday and Monday.