Donor-Advised Funds: Contribute Now, Donate Later
Get a tax break and time to choose a charity.

Selecting a charity that will use your money wisely and effectively isn’t easy, particularly during this hectic time of year. Donor-advised funds are one solution. These funds allow you to make a charitable contribution now and claim the tax deduction on your 2013 tax return, but distribute the money later. The funds are ideal for busy people who want to give but aren’t sure which charities to support, says Martin Shenkman, a New Jersey lawyer who specializes in tax and estate planning.
Interest in donor-advised funds typically swells in bull markets, and this year is no exception. At Fidelity, the number of new accounts in the first half of 2013 was up 43% over the first half of 2012. That’s because donor-advised funds are a tax-efficient way to donate taxable stock, mutual funds or other assets that have gained in value. You can claim a deduction for the entire market value of the securities. Your donor-advised fund will sell the securities and add the proceeds to your account.
The funds are a tax-break twofer. You avoid capital gains taxes, and the donor-advised fund doesn’t have to pay them, either, which means there’s more money available for charity, says Kim Laughton, president of Schwab Charitable. Some large donor-advised funds, such as Fidelity Charitable, also accept donations of illiquid assets, such as non-publicly traded securities and real estate.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
You don’t need to be Bill Gates to contribute to a donor-advised fund. The minimum required to open an account at Fidelity Charitable and Schwab Charitable is $5,000; at Vanguard Charitable, it’s $25,000. Some community foundations offer donor-advised funds with minimums as low as $1,000.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.
-
Ten Cheapest Places to Live in Texas
Property Tax Looking for a cheap place to live in Texas? Look no further. These counties have the lowest property tax bills in the Lone Star State.
-
AI Is Missing the Wisdom of Older Adults: What It Means for You
AI will increasingly affect your healthcare and finances, but young workers are primarily designing the systems and getting most of the jobs.
-
Homeschoolers: 529 Plan Savings Could Soon Work for You
Savings Accounts A new House GOP bill could change how you save for your child's homeschool education. Find out how.
-
Ohio Announces Two-Week Sales Tax Holiday Amid Tariffs, High Prices
State Tax Ohioans won't want to miss out on savings as pressure from tariffs spikes prices.
-
Five ‘Big Beautiful Bill’ Tax Changes to Watch in the Senate
Tax Policy The House passed its version of Trump’s "One Big, Beautiful Bill." Here’s what to look for as Senate Republicans take up the mega legislation.
-
New GOP Car Loan Tax Deduction: Which Vehicles and Buyers Qualify
Tax Breaks To fulfill Trump's campaign promise, House GOP lawmakers want to offer a tax deduction for car loan interest. How would it work?
-
Big GOP Tax Bill Could Change Your Estate Planning for 2025
Tax Law The GOP might extend and increase the higher estate and gift tax exemption and AMT thresholds. What might this mean for your estate plan?
-
New 'No Tax on Tips' Bill Approved: What to Know Now
Income Taxes Will you stop paying taxes on your tip income this year?
-
Millions Could Lose SNAP Food Benefits Under Trump Tax Cut Plan
Tax Policy The House Agriculture Committee approved nearly $300 billion in cuts to SNAP benefits, putting many at risk of hunger.
-
Missouri Leads Capital Gains Tax Repeal: Will Your State Follow?
State Tax As one state becomes a test case, policymakers and taxpayers across the U.S. will be watching closely to see what happens next.