The following is a reprint of the JCF's Money Matters column, published in the April 17, 2024 issue of the Jewish Community Voice, titled, "Prepare for Tax Day 2025 with a Donor Advised Fund":
With Tax Day recently concluding and still fresh in mind, consider a helpful product offered by the Jewish Community Foundation, Inc. (JCF) that can prepare you for Tax Day 2025: If you haven’t done so already, open a donor advised fund (DAF) to gain many benefits, including these five:
Manage Your Charitable Giving Online: The beauty of a donor advised fund lies in its simplicity. By establishing a DAF through the JCF, you can consolidate your charitable giving into one tax-advantaged account. Once the fund is established, you can contribute a variety of assets, including cash and appreciated stock or bonds. Then, you simply log-on and recommend grants to your favorite causes at any future time.
Get Creative with Your Philanthropy: Do you pay synagogue dues? Do you annually support multiple charitable organizations such as the Jewish Federation of Southern New Jersey and its family of agencies or other Jewish or secular nonprofits? Do you like to give to people in critical need such as the Israel Emergency Campaign or for disaster relief? A DAF allows you to have the dollars at hand for when you are ready to put them to use. Some donors even opt to add to their DAF steadily during their working years, allowing the fund to grow tax-free while it is professionally invested, and then draw down the fund during retirement by recommending grants. Or perhaps you aim to make a big “splash” with a larger donation in the future by starting small and growing the DAF over time. These options and others make your charitable giving very flexible.
Bundled Giving, Bigger Tax Benefits: JCF Board member and DAF advisor Jason Levine described how he and his wife Marci can use the fund, “With the federal tax law that went into effect a few years ago, donors can benefit by ‘bundling’ charitable gifts. A DAF allows us to make higher charitable gifts during a particular year, so we can take advantage of itemizing our deductions and then allocate that money over a multi-year period.” As a notable bonus, a DAF consolidates your tax records so you don’t need to track paperwork during the year.
Family Legacy and Collaborative Giving: For many families, a DAF can provide a unique opportunity to engage family members in charitable giving and pass down values of tzedakah. By involving children, grandchildren, and even extended family members in the decision making process, families can nurture a culture of giving that even transcends individual lifetimes. Whether through intergenerational discussions, collaborative grantmaking, or shared philanthropic experiences, DAFs offer a platform for families to unite around a common purpose and make a collective impact.
Gain Privacy and Anonymity: In an age where privacy concerns are paramount, a DAF offers you a level of anonymity that traditional charitable giving may not provide. While you have the option to disclose your grants and support publicly, you also have the ability to make anonymous contributions and maintain confidentiality about your philanthropic activities. This added layer of privacy can be particularly appealing if you generally prefer to keep your charitable giving private or wish to avoid solicitation from other organizations.
Hundreds of community members have started DAFs with the JCF, and, in the past year, these donors recommended nearly $2-million in grants to benefit scores of charitable causes, predominantly Jewish agencies and synagogues in South Jersey.
To learn more about donor advised funds or to get started on opening a DAF of your own, contact me at (856) 673-2571 or dsnyder@jfedsnj.org or visit jcfsnj.org/daf today.
Wishing you a happy, healthy, and sweet Pesach!