Philanthropy has grown with time, and people have stopped being ignorant towards it. It has taken a big step in the development of society. Donor Advised Funds ( DAF ) are established as a charity account where a person can store funds, assets, or any other form of donation for giving to any charitable organization. The number of DAF accounts has been increasing considerably.
Tax deduction is one of the several factors giving rise to increasing accounts. The donors can make the transaction any time they like, from the DAF accounts to any favorable charitable organization. Although these accounts have been criticized a lot by critics, they come with a whole lot of benefits for donors.
We shall talk about the benefits of a DAF account in this article.
There will be a reduction in tax when you add money or assets to the donor advised funds. It is also because of this reason that philanthropists add stocks, real estate, and other assets onto the DAF account. This helps their assets in growing and also gives them the benefit of saving taxes. All the investments made in the account are tax-free, thus helping the capital to grow.
Later on, they can pay these amounts to any charitable trusts of their wish in the future or keep it in the account for the later generation to donate. One can transfer amounts any day and make grants any time in the future.
A DAF account can be personalized in different ways. Any family member or assistant, or relatives can be given the responsibility of managing the funds of the account. A person can make a plan of the growth of assets during his lifetime and the distribution of funds to a different or a single charitable organization through the donor advised funds.
Through a DAF account, one can make a definite strategy to donate through different trusts in a long course of time. A majority of people have taken up donor advised funds as the most suitable way of fulfilling their philanthropist’s means. One can accumulate funds and assets in the account and make it grow as the account helps in a deduction in taxes. One can donate at the proper time as the person wants.
One can support the desired charity trust they want and at the proper time. The concept of DAF accounts by the government can be considered as a milestone decision as it encourages people to provide a part of their wealth to the different charity trusts which serve different parts of society. The grants made by the donor will be used for the benefit of the needy.
It is always said that the more you donate, the more the person earns. Charity is even a way of removing sins and worshipping God in the purest form and keeping oneself calm. By the donated amount, several people’s wishes are fulfilled.
Moreover, granting money through DAF accounts is advisable for other benefits too. More than 3% of the total donation of the United States are made through donor advised funds. There are several organizations that look after the DAF accounts and advise them in granting funds in a better way.
Donor-Advised Funds not only help a person in doing charity but also give a whole lot of tax benefits. It also helps in strategizing the donations to be made by a person. The points mentioned above mention the benefit of having a donor advised fund and why one should allocate their funds properly for donation.