The Tax Benefits of Donating to a Donor-Advised Fund

Many funds will welcome donations of all sorts.

Do I have to donate cash to a donor-advised fund, or can I give stock, too? Which gives the bigger tax benefit? --M.P., Tallahassee, Fla.

You can give cash, stock and a variety of other investments to a donor-advised fund. Donating appreciated assets held for more than a year gives you an extra tax break: You’ll get a charitable deduction for the current value as well as avoid taxes on the capital gains. Plus, with these funds, you can donate stock when it reaches a certain price but wait to choose the charities to support. You can also give assets that are less common. Fidelity’s donor-advised fund, for instance, accepts gifts of real estate, oil and gas interests, and privately held stock, which many charities won’t accept directly.

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.