It’s the fourth quarter of 2023. Now is a great time for donors to meet with their financial advisors to review potential charitable contributions.
Tax-smart planning if using a donor-advised fund
A donor-advised fund (DAF) is a popular charitable giving vehicle that allows donors to make a charitable contribution to an eligible fund,1 receive an immediate tax deduction, and then recommend grants from the DAF to their favorite charities over time. Donors can contribute to the fund as frequently as they like, and then recommend grants to their favorite charities whenever it makes sense for them.
SEI offers a DAF called the SEI Giving Fund. The SEI Giving fund is administered by Renaissance Charitable Foundation.
Donors receive an immediate tax benefit by contributing assets and/or cash to the DAF. If donating appreciated assets (held for more than one year), the donor gets to deduct the fair market value of the assets, subject to certain limitations,2 and avoids the capital gains tax on appreciated assets. Donor-advised funds are designed to allow donors and their families to meet philanthropic goals for generations to come.
Example: You have owned XYZ stock for a long time; it has a fair market value of $15,000 and a cost basis of $5,000. If you were to sell the stock, that would be a $10,000 long-term capital gain and at a 20% tax rate,3 $2,000 in taxes due.
If you donate the stock to a DAF such as the SEI Giving Fund, the stock will be sold by the DAF, a charitable entity. The proceeds will be invested into an available mutual fund strategy. You can save $2,000 in taxes and receive a $15,000 charitable contribution deduction.4
National Day of Giving encourages giving back. Every year, on the Tuesday after Thanksgiving, people take the time to kick off the holiday season by giving back to their community. Whether it is donating money to a charitable cause or volunteering, Giving Tuesday is a day to benefit the community.
Donating to your donor-advised fund can be a great way to participate in the National Day of Giving.
Reach out to your financial advisor to discuss if a donor-advised fund fits into your financial future.
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Information provided by Independent Advisor Solutions by SEI, a strategic business unit of SEI Investments Company (SEI). Your financial advisor is not affiliated with SEI® or its subsidiaries. Data as of September 30, 2023.
Please note that (i) any discussion of U.S. tax matters contained in this communication cannot be used by you for the purpose of avoiding tax penalties; (ii) this communication was written to support the promotion or marketing of the matters addressed herein; and (iii) you should seek advice based on your particular circumstances from an independent tax advisor.
Investing involves risk including possible loss of principal.
This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information is for educational purposes only and should not be interpreted as research, legal opinion, or advice.
Certain information contained herein has been provided to SEI by an unaffiliated third party. SEI cannot guarantee the accuracy or completeness of the information and assumes no responsibility or liability for its incompleteness or inaccuracy.
Information provided as examples does not constitute investment recommendations or advice.
SEI Giving Fund is a program of the Renaissance Charitable Foundation Inc. Contributions are irrevocable. Once the Foundation accepts a contribution, the gift may not be refunded. All accepted gifts become the exclusive legal property of the Foundation.
Renaissance Charitable Foundation Inc. is registered to solicit contributions in every state where such registration is required including the District of Columbia. The following disclosure notices are required by state laws.
Florida: A copy of the official registration and financial information may be obtained from the Florida Division of Consumer Services by calling toll-free 800-435-7352 within the state. Registration does not imply endorsement, approval, or recommendation by the state of Florida. Our Florida registration number is ch13085.
Maryland: A copy of the current financial statement of Renaissance Charitable Foundation Inc. is available by writing 8910 Purdue Rd., Suite 555, Indianapolis, IN 46268, or by calling 800-918-3650. Documents and information submitted under the Maryland Solicitations Act are also available, for the cost of postage and copies, from the Maryland Secretary of State, State House, Annapolis MD 21401, 410-974-5534.
Mississippi: The official registration and financial information of Renaissance Charitable Foundation Inc. may be obtained from the Mississippi Secretary of State’s office by calling 888-236-6167. Registration by the Secretary of State does not imply endorsement by the Secretary of State.
New Jersey: Information filed with The attorney general concerning this charitable solicitation and the percentage of contributions received by the charity during the last reporting period that were dedicated to The charitable purpose may be obtained from the attorney general of the state of New Jersey by calling 973-504-6215 and is available on the internet at http://www.state.nj.us/lps/ca/charfrm.htm. Registration with the attorney general does not imply endorsement.
New York: A copy of the current financial statement of Renaissance Charitable Foundation Inc. may be obtained by writing 8910 Purdue Rd., Suite 555, Indianapolis, IN 46268, or by writing the New York State Attorney General’s Charities Bureau, Attn: FOIL Officer, 120 Broadway, New York, NY 10271.
North Carolina: Financial information about this organization and a copy of its license are available from the North Carolina State Solicitation Licensing Branch at 919-807-2214. The license is not an endorsement by the state.
Pennsylvania: The official registration and financial information of Renaissance Charitable Foundation Inc. may be obtained from the Pennsylvania Department of State by calling toll-free within Pennsylvania, 800-732-0999. Registration does not imply endorsement.
Virginia: A copy of the current financial statement of Renaissance Charitable Foundation Inc. is available upon request by writing the Office of Consumer Affairs, Department of Agriculture and Consumer Services, P.O. Box 1163, Richmond, VA 23218.
Washington: A copy of the current financial statement of Renaissance Charitable Foundation Inc. may be obtained from the Office of the Washington Secretary of State by calling toll-free 800-332-4483.
West Virginia: West Virginia residents may obtain a summary of the registration and financial documents from the Secretary of State, State Capitol, Charleston, WV 25305. Registration does not imply endorsement.
Wisconsin: A copy of the latest financial report filed with the Wisconsin Department of Regulation and Licensing may be obtained.