Here's a strategy for getting the biggest bang from charitable giving. Or is it really just knowing that we have to make contributions by year's end to lock in tax deductions. You donate cash or securities to the gift fund and then direct how your investment should be divvied up among different pools of mutual funds offered by the family. If you donate stocks or funds, the fund company liquidates the securities and reinvests the proceeds. 1 Fees include fund management costs and administrative expenses.
Fees are lower in some cases for very large accounts.
You get a tax deduction in the year you make the contribution and then, whenever you're ready, you direct the fund to make charitable donations in your name. Charitable gift funds offer several advantages over making direct contributions on your own. One is administrative ease. You'll have clear documentation of the contributions you make over the years as well as a record of which charities have benefited from your largesse and by how much. Many fund companies will give you online access to such information, and also let you direct your contributions through their sites.