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Donor Advised Funds: A Smart Way to Give to Charity

If you are looking for a simple, flexible, and tax-advantageous way to give to your favorite charities, you may want to consider establishing a donor advised fund (DAF) with the United Methodist Foundation of West Virginia. A DAF is a charitable giving account that allows you to donate cash, stocks or other assets to the Foundation and then recommend grants to virtually any IRS-qualified public charity. The Foundation has the ultimate decision on whether to make your recommended distribution, but as long as it meets IRS guidelines and does not conflict with our mission, we follow your advice. Here are some of the benefits of using a DAF for your charitable giving:

•    You can claim an immediate tax deduction for your contributions to the DAF, regardless of when you make the grants to the charities. This can help you reduce your taxable income and plan your giving strategically.
•    You can avoid capital gains taxes on assets that have appreciated in value, such as stocks or real estate, by donating them directly to the DAF. You can also deduct the fair market value of the assets, rather than their original cost basis, which can increase your tax savings.
•    Over time, the fund will grow through investments. This can potentially increase the amount of money available for distributions over time.
•    You can support multiple charities with one donation, and easily track your giving history and receipts online. You can also involve your family members in your giving decisions and create a legacy of philanthropy for future generations.
•    You can enjoy the flexibility and convenience of making grants at any time, without any minimum or maximum requirements. You can also change your charitable preferences as your interests and needs evolve.
A DAF is not only a smart way to give to charity, but also a meaningful way to make a difference in the world. By using a DAF, you can support the causes you care about most, while enjoying significant tax benefits and simplifying your giving process.

When John C. Wright died in June 2022, Mary Wright Taylor and her two brothers were the remaining trustees of the Wright Family Foundation, created by their parents, John C. and Becky Lewis Wright. Because the three siblings are spread out geographically and have different charitable interests, they decided that each could distribute one-third of the value of the Trust as of the date of Mr. Wright’s death. Mary decided to distribute her one-third share to The Foundation to establish the Mary Wright Taylor Charitable Fund, where she can enjoy distributing those funds over time to her various charitable interests.

Dr. Tulsi Joshi, a professor at Fairmont State University, contacted The Foundation to learn about DAFs as an alternative to his family foundation. Dr. Joshi wanted to provide benefits to help provide educational resources for Nepalese students, but he found the reporting requirements and minimum spending requirements of a family foundation to be expensive and burdensome.

Mary Taylor and Dr. Tulsi Joshi are among the many Foundation donors who have discovered that in many ways a DAF provides all the benefits of a family foundation or private foundation without the hassle. While they can only give advice and suggestions (and not direction), as a practical matter The Foundation accepts their suggestions as long as they are aligned with our values and comply with IRS rules and regulations.

To learn more about DAFs, please contact Jeff Taylor or Kim Matthews.

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