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.
-
Stock Market Today: Have We Seen the Bottom for Stocks?
Solid first-quarter earnings suggest fundamentals remain solid, and recent price action is encouraging too.
By David Dittman
-
Is the GOP Secretly Planning to Raise Taxes on the Rich?
Tax Reform As high-stakes tax reform talks resume on Capitol Hill, questions are swirling about what Republicans and President Trump will do.
By Kelley R. Taylor
-
Trump’s Tax Cut Risks Your SNAP, Medicaid Benefits
Tax Cuts The GOP budget blueprint could slash lifesaving programs for millions of U.S. households.
By Gabriella Cruz-Martínez
-
Missed Tax Day? Nearly One Million Taxpayers Still Can File and Claim Valuable Tax Refunds
Tax Refunds As many as one million taxpayers could be missing out on a significant tax refund.
By Gabriella Cruz-Martínez
-
Which Generation Pays the Most Tax in the US?
Tax Burden Polls show that most people feel like taxes are unfair. But which age group bears the brunt of the tax burden in the United States?
By Kelley R. Taylor
-
How the Trump Harvard IRS Tax Threat Could Impact You
Tax Law Trump's latest higher education showdown raises fundamental questions that could reach beyond Harvard's nonprofit tax status.
By Kelley R. Taylor
-
Tax Day 2025: Don’t Miss These Freebies, Food Deals and Discounts
Tax Day You can score some sweet deals on April 15 in some select restaurants like Burger King, Shake Shack, and more.
By Gabriella Cruz-Martínez
-
Tax Time: Does Your Kid Influencer Owe Taxes?
State Tax Some minors are making big money on social media. Here’s how to know if they need to file taxes.
By Gabriella Cruz-Martínez
-
Did Florida’s Chance at $1,000 in Property Tax Rebates Vanish?
State Taxes The Florida Legislature bypassed Gov. Ron DeSantis’ wish to cut property taxes and instead voted to lower the state’s sales tax.
By Gabriella Cruz-Martínez
-
How Caregivers for Adults Can Save on Taxes in 2025
Tax Breaks Caring for your parent or spouse can be stressful, but the IRS offers tax breaks for qualifying taxpayers. Here they are.
By Kate Schubel