Five questions to ask your financial advisor about giving

When giving, it’s important to have all your ducks in a row. The process can be arduous (completing forms, gathering paperwork for tax season, etc.), but by asking your financial advisor the right questions, you can be more prepared to maximize your giving strategy to its full potential.

Here are a few questions to consider asking your financial advisor before beginning your giving journey.

Is it possible to set aside a specific amount for giving purposes?

Absolutely! One option to consider is a donor-advised fund. This type of fund allows you to allocate funds solely for giving – once they’re added to the account, they cannot be withdrawn for any other purpose. It’s like having your own charitable foundation! Additionally, funds added to these accounts can be invested and may appreciate over time, which means you could give more to the causes and organizations you admire most.

Are there any giving options with tax advantages?

While taxes are a part of life, there are options available to make the best use of your funds. One of those being a donor-advised fund. As mentioned previously, funds contributed to a donor-advised fund will appreciate, but its growth is also exempt from tax deductions. In fact, any funds that enter or leave your account are tax-exempt! Plus, your investment in a donor-advised fund is the taxable event – not the individual grants you give out of the fund. This means that you only have to manage a single or small handful of gift paperwork when it’s time to file your taxes.

There’s a lot of paperwork to keep up with when giving. Do I have any options for bookkeeping when it comes to grantmaking?

When you create a donor-advised fund with a foundation, the foundation takes on all responsibility for paperwork. This means you receive receipts at the end of the fiscal year for tax purposes. We also handle the distribution of grants to your designated causes or organizations – all you have to worry about is where and how much to give!

What are my options for donating stock?

With a donor-advised fund, you’re able to grant stock, mutual funds, real estate or other tangible assets. Appreciated stock gifts, both publicly traded and closely held, allow donors to receive a tax deduction equal to the stock’s value without paying a capital gains tax. 

Philanthropy is an important part of my personal philosophy. How can I involve my family in my giving practice?

Instilling a giving spirit in children and grandchildren is often at the top of many adults’ lists. It’s a way to pass on your legacy and encourage your family to continue the work you’re passionate about. A great tool to encourage giving among your family is a donor-advised fund. Family members including spouses, children and/or grandchildren can participate in grantmaking as fund advisors. At CCF, we also offer a NexGen Fund, an account created for a child, grandchild or godchild (regardless of age). Once they’re of legal age, they gain full access and are able to begin giving with the funds left for them.

When preparing to give, it’s important to have all the information you need to make an informed decision, so be sure to ask your financial advisor any and all relevant questions. If you’d like more information about donor-advised funds or CCF in general, please feel free to contact us!