Resources created and curated to support the growth of impact investing, for those new to the field and for experienced practitioners.
As you do tax and estate planning with your Tax Advisor, it is important to discuss the role of charitable giving. Consider that taxpayers benefitted from $21 billion of estate tax charitable deductions in 2017. This makes donor advised funds such as The ImpactAssets Donor Advised Fund highly useful for maximizing charitable tax benefits while providing flexibility for giving needs.
The ImpactAssets Donor Advised Fund allows you to decouple the timing of the tax deduction from the distribution of donations to your favorite charities. For example, if you donate assets in 2020, you will receive an immediate tax deduction for 2020, but can specify which charities the funds should go to for years to come. This makes a donor advised fund account useful for situations such as:
The 2017 Tax Cuts and Jobs Act doubled the standard deduction for charitable donations from roughly $12,000 to $24,000 for a married couple filing jointly. This has made donor advised funds even more popular as charitable giving vehicle for donors who want to continue to maximize their charitable tax savings by itemizing deductions. With control of the timing of your tax deduction, you can bunch multiple years of charitable contributions into one year to meet the new itemized deduction minimum, and designate grants over time as you would have before the new tax law was in place.
The ImpactAssets Donor Advised Fund offers you flexibility in donating assets that other charities may not be able to accept, such as appreciated stock, personal property, real estate, and non-publicly traded securities. For example:
If you have made significant financial gains from appreciated stock or another financial windfall, giving directly to a donor advised fund is one of the most efficient ways to offset your capital gains tax. You receive an income tax deduction for the full market value of the stock at the time of the donation. By avoiding a capital gains tax you'll also have more money available to donate to the causes you care about. Learn more about Donating Appreciated Stock.
The donated assets you hold in an ImpactAssets Donor Advised Fund account are invested through our 100% Impact Investing Platform while we await your grant recommendations. We offer a variety of impact investment options, including turn-key impact portfolios, socially and environmentally screened mutual funds and ETFs, private debt and equity impact funds and custom investments. Any asset appreciation or investment income is tax-free, offering the potential for greater charitable impact than assets invested in taxable accounts.
Record keeping is simplified through The ImpactAssets Donor Advised Fund. You receive one tax receipt from ImpactAssets no matter how many grants you recommend throughout the year. The only tax receipt you will need for filing is for any contributions you have made to your account.
The most important part of estate planning is ensuring that your legacy endures. ImpactAssets Donor Advised Fund accounts can be left to heirs, allowing them to make grant recommendations in your honor without the burden of administrative work usually required for setting up and running a family foundation. All administrative work for The ImpactAssets Donor Advised Fund is taken care of by our staff, so that heirs can simply make grant recommendations to support the charities and causes that they and their loved ones cared most about.
The following chart provides a brief comparison of deductibility limits on contributions to The ImpactAssets Donor Advised Fund versus private foundations.
|Donor Advised Fund||Private Foundation|
|Tax Deductions - Cash||60% of AGI/year||30% of AGI/year|
Tax Deductions - Securities
& Real Properties
|30% of AGI/year||20% of AGI/year|
|Grant Requirements||5% annually suggested||5% annually required|
|Excise Tax on Investment Income||None||Up to 2% of income|
|Anonymity||Upon request||Taxes - grants are public|
|Separate Tax Return Required||None||Yes - Form 990|
|Annual Administrative Costs||.125%-1% (for The ImpactAssets Donor Advised Fund)||Variable/high|
Please note there are a number of factors to consider when assessing the tax implication of gifts to charity. Individuals should consult with a tax specialist before making any charitable donations.
 IRS ‘Estate Tax Statistics’ report: https://www.irs.gov/statistics/soi-tax-stats-estate-tax-statistics-filing-year-table-3