Article Date:
May 2022

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Donor-Advised Funds: A Tax Planning Tool for Church and Charity Donations

Do you give money to your church?


Do you get a tax benefit from those donations?


How about your donations to other charities?


Recent changes in the tax code have done much to destroy your benefits from church and other tax-deductible 501(c)(3) donations. But there’s a way to donate the way you want, get revenge on the tax code, and realize the tax benefits you deserve.


This get-even tool is the donor-advised fund, an increasingly popular way to donate to your church and other 501(c)(3) organizations. Indeed, donor-advised funds have exploded over the past few years, with over one million donor-advised fund accounts in existence as of 2020.1


If you’re charitably inclined, there are many benefits to donor-advised funds and few drawbacks, as you will see in this article.


What Is a Donor-Advised Fund?


A donor-advised fund is not a separate charitable entity. It is a charitable giving account you establish with a “sponsoring organization,” which must be a Section 501(c)(3) organization.2 (This differs from a private foundation, which is a separate legal entity established and controlled by its founders—and is much more complex and expensive to establish and administer.)


With a donor-advised fund, you make a charitable gift of cash or property to an account maintained by the fund. ... Log in to view full article.

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