You get a tax break in the year you contribute the money to a donor-advised fund but can decide which charities to support later. By Kimberly Lankford, Contributing Editor November 26, 2014 My family is thinking about setting up a donor-advised fund so all three generations can work together to decide which charities to support. How much money do we need to open up this kind of fund, and do we get a tax break for our contributions?See Our Slide Show: 15 Surprising Tax Deductions Many brokerage firms, mutual fund companies and community foundations let you open a donor-advised fund, which allows you to pool your money in one place and decide where to donate it later. The amount you need to open the fund varies by provider. Charles Schwab and Fidelity let you open a donor-advised fund with $5,000; T. Rowe Price requires $10,000. You may be able to open an account at a local community foundation for less. As long as you itemize deductions on your income tax return, you can write off the amount you contribute to the fund as a charitable contribution for the year you make the donation. But you have almost unlimited time to decide which charities to support. In the meantime, the money grows in the account, either in mutual funds or investment pools. You can give cash, stocks, mutual funds or other assets, and some donor-advised funds even accept shares of privately held companies, real estate and other complicated assets. If you plan to sell stock or funds that have increased in value and use that money to give to charity, it’s a good idea to give the appreciated shares to the donor-advised fund rather than selling them first. When you transfer the shares, you avoid paying capital gains taxes on the increase in value since you purchased them; you can deduct the value of the shares on the day you give them away. Many families use these funds to work together toward charitable goals, without the cost and administrative complexity of setting up a family foundation. Some families, for example, have members of all ages research charities during the year, then get together during the holidays to decide which charities to support. You have pretty much unlimited time to decide which grants to make (you may be required to give a minimum amount every few years from the fund), and you can generally give the money to any 501(c)(3) organization in good standing. The size of the grants varies by administrator but can be as little as $50. The average grant made by Fidelity Charitable funds in 2013 was just over $4,000. For more information, see Donor-Advised Funds: Contribute Now, Donate Later. Got a question? Ask Kim at email@example.com.