BREAKING NEWS Morning shooting in Amory: 1 dead, 1 in custody Full Story
WEATHER AUTHORITY : Heat Advisory - Excessive Heat Warning View Alerts

Here's how to donate to a Top 10 CNN Hero

Anderson Cooper explains how you can easily donate to any of the 2018 Top 10 CNN Heroes, through CrowdRise. Conditions apply.

Posted: Dec 13, 2018 1:46 PM
Updated: Dec 13, 2018 2:02 PM

I've heard a lot about donor advised funds. Are they a good way to structure my charitable giving while getting tax benefits?

A donor advised fund is a relatively simple, flexible and tax-efficient way to grow your investments and give to charity.

Think of it as a dedicated account for your charitable giving. It allows you to contribute cash, securities or other assets to the fund and get an immediate tax deduction. You maintain control of your investments, which grow tax-free since they are charitable donations, and make grants to the IRS-qualified charity you choose.

You can open a fund with as little as $5,000. All the money you put in goes to charity (once it's in, you're not getting it back), but you get an immediate tax break. Deciding how the money gets distributed is up to you: dole out $2,000 every year to a bunch of different charities, for example, make a significant gift of a $1 million ten years from now, or create a fund as a legacy for your children to continue to distribute after your death.

"Donor advised funds are one of my go-to strategies for reducing taxes for people who are already charitable," says Patrick King, a certified financial planner with Transformative Financial.

Here's how to figure out if a donor advised fund is the best way to accomplish your giving goals.

The benefits

Opening a fund is relatively easy. You can do it through many public charities such as Fidelity Charitable, Schwab Charitable, the National Philanthrapic Trust or a community foundation. You just need a Social Security number and at least $5,000 to invest, though some charities may have higher minimums.

If you donate cash, you're eligible for a tax deduction of up to 60% of your adjusted gross income.

But the real appeal of donor advised funds for many investors is that they might accept a wide variety of donations — including publicly traded securities, restricted stock, mutual fund shares, cryptocurrencies, private equity and hedge fund interest, real estate or privately held C-corp or S-corp shares — that charities often cannot accept.

"Donor advised funds have gotten to a place where they can take more complex assets," says Tina Davis Milligan, managing director of family office services at BMO wealth management. "A lot of clients have large capital gains and they may give more than they planned because it becomes more meaningful."

This is where investors can find very favorable double tax benefits. If you give these appreciated assets directly to a donor advised fund, you can, first, avoid paying capital gains tax and, second, take an additional income tax deduction in the amount of the full fair market value of the asset, up to 30% of your adjusted gross income.

A donor advised fund could make a great deal of sense right before retirement, says Michael Troxell, an investment adviser and certified public accountant with Modern Financial Planning.

"While a near-retiree is still working and in a high tax bracket, they could contribute a large amount of charitable giving (say 10-20 years worth) to a DAF in order to maximize the tax benefit while being able to distribute the funds to charitable organizations over the course of their retirement," says Troxell.

A good time to establish or add money to your fund is after a significant swell in assets — maybe a retirement payout, an unusually high bonus or the sale of a company.

"When a client has a big year, a donor advised fund can 'front load' their charitable giving for future years while providing a large charitable deduction in the year they need it most," says King.

The pitfalls

Like any investment, the value of a donor advised fund fluctuates. Don't get in over your head with a fund that includes costly or risky investments, says Dan Stous, the director of financial planning at Flagstone Financial Management.

Another mistake is opening a DAF with a high-cost provider. "There may be some premium services offered by some providers to justify a fee, like acting as a consultant to connect the giver with charities in their community, or talking through complex gifting situations, but givers should know what they're paying, and know what they're getting for that fee."

But the biggest pitfall with a DAF is to simply view it as an investment or tax-reduction vehicle, says Stous.

"Ultimately, donor advised funds are a way to give to charity," he says. "If your primary reason for putting money in a fund is something other than a generous heart, you're setting yourself up for disappointment."

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 343505

Reported Deaths: 7543
CountyCasesDeaths
Hinds23932444
DeSoto23229283
Harrison20527329
Rankin15411291
Jackson15232252
Madison10959227
Lee10719179
Jones9047169
Forrest8723159
Lauderdale7884244
Lowndes7054151
Lamar702989
Lafayette6548124
Washington5595139
Pearl River5196152
Bolivar4954134
Oktibbeha494398
Panola4771112
Warren4728128
Marshall4701106
Pontotoc447773
Union433279
Monroe4330137
Neshoba4281181
Hancock428088
Lincoln4176116
Pike3667113
Leflore3627125
Tate353388
Alcorn350974
Sunflower347694
Scott341176
Adams340988
Yazoo339376
Copiah324968
Simpson322891
Itawamba314680
Coahoma314085
Tippah306568
Prentiss298863
Covington293484
Leake285475
Marion284181
Wayne277543
George272251
Grenada269488
Newton262364
Tishomingo239770
Winston236784
Jasper230648
Stone229637
Attala226373
Chickasaw219060
Holmes200174
Clay197654
Clarke186880
Tallahatchie183742
Calhoun181332
Smith179235
Yalobusha171540
Walthall145748
Lawrence142826
Greene140134
Amite137543
Noxubee135235
Perry133538
Montgomery133044
Carroll126431
Webster121232
Jefferson Davis116734
Tunica114227
Benton106725
Claiborne105331
Kemper102429
Humphreys100133
Franklin87923
Quitman84719
Choctaw82619
Wilkinson78032
Jefferson71328
Sharkey51618
Issaquena1736
Unassigned00

Alabama Coronavirus Cases

Cases: 577463

Reported Deaths: 11510
CountyCasesDeaths
Jefferson841981589
Mobile47171860
Madison37047533
Tuscaloosa26915465
Shelby26873256
Montgomery25918625
Baldwin24499328
Lee16949181
Calhoun15252332
Morgan15017290
Etowah14778370
Marshall12933235
Houston11774292
Elmore10761217
St. Clair10617252
Limestone10574158
Cullman10363205
Lauderdale10083254
DeKalb9382191
Talladega8836188
Walker7681287
Autauga7479114
Jackson7317117
Blount7266139
Colbert6635142
Coffee6163132
Dale5453117
Russell470642
Chilton4682117
Covington4649125
Franklin450081
Tallapoosa4440156
Escambia427882
Chambers3898125
Dallas3717163
Clarke367763
Marion3427106
Pike327879
Lawrence3225101
Winston294973
Bibb284565
Geneva276383
Marengo259967
Barbour246261
Pickens240062
Butler238272
Hale232778
Fayette225264
Henry209245
Monroe197241
Randolph196744
Cherokee196348
Washington180139
Macon168752
Crenshaw165558
Clay163759
Cleburne160245
Lamar149938
Lowndes144854
Wilcox130531
Bullock126142
Conecuh119630
Coosa116929
Perry109928
Sumter109032
Greene98736
Choctaw64325
Out of AL00
Unassigned00
Tupelo
Clear
96° wxIcon
Hi: 97° Lo: 78°
Feels Like: 107°
Columbus
Clear
95° wxIcon
Hi: 95° Lo: 78°
Feels Like: 111°
Oxford
Partly Cloudy
93° wxIcon
Hi: 95° Lo: 75°
Feels Like: 103°
Starkville
Clear
93° wxIcon
Hi: 95° Lo: 76°
Feels Like: 105°
Very hot and very humid conditions linger in our area for our Saturday. However, the heat and humidity start to dwindle a bit as we go into our Sunday and beyond. As a matter of fact below normal high temperatures for this time of year.
WTVA Radar
WTVA Temperatures
WTVA Severe Weather