Thursday, July 22, 2010

Donor-Advised Funds

Even the much-maligned financial services industry comes up with a good idea once in a while. Simplified philanthropy, for instance, made possible by donor-advised funds.

A couple of years ago, before the Great Recession, assets in donor-advised funds were estimated at $28 billion or more. The current figure is probably a bit lower, but Schwab and others report new donations are flowing freely.

Last year the WSJ reported that donors are closing down their private charitable foundations and moving the assets into donor-advised funds. Advantages: less regulatory hassle, less paperwork, lower annual running costs.

Will higher tax rates on income and capital gain help donor-advised funds attract even more philanthropists next year?

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