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Charitable solutions comparison

10.02.23 // Planning and Retirement // Blog Article

Compare various charitable giving vehicles to determine which option aligns with your giving goals and objectives.

Donor advised funds Private foundation Charitable remainder and lead trusts Cash or check
Consider when You want a simple solution with low costs and the potential to grow tax-free You want to run your own charity, employ staff, and have greater flexibility on grant-making You want a trust that can generate income for heirs or charities You want to keep track of your own donation receipts or make one-off gifts
Organizations you can give to IRS-qualified public charities Various organizations and potentially individuals, if as a result of a documented program IRS-qualified public charities, DAFs, and private foundations (in most cases) Public charities, private foundations and individuals (although a gift to an individual is not necessarily tax-deductible)
Time to establish Immediately Several weeks/months Several weeks/months Immediately
Typical minimum $5,000-$10,000 $1 million+ $1 million+ Any
Costs to establish X ✓ ✓ X
Ongoing costs ✓ ✓ ✓ X
Growth potential ✓ ✓ ✓ X
Donations of non-cash assets ✓ ✓ ✓ X
Income tax deduction (as a % of Adjusted Gross Income) 60% for cash
30% for appreciated assets		 30% for cash
20% for appreciated assets		 Depends on the type of trust and type of charity being supported 60% when donating to a public charity
30% when donating to a private foundation
Tax on investment income X ✓
1.39% of net investment income		 ✓ X
Depends on nature of trust		 N/A
Required annual distributions X
Typically no, but can vary by DAF program sponsor		 ✓
At least 5% of net asset value		 ✓
Typically at least 5-6% of market value		 N/A
Required to file its own tax return X ✓ ✓ N/A
Give anonymously ✓ X ✓ X
Ability to name successors ✓ ✓ ✓ X

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To learn more about your charitable giving options, contact your financial advisor.

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