By Jerry Love, LBF Communications
In the past several years a relatively new “gift vehicle” has seen more use in providing gifts to Baptist ministry.
The Donor Advised Fund offered by the Louisiana Baptist Foundation is designed to accommodate individuals who desire to make donations to one or more charitable institutions in a relatively flexible arrangement.
In a nutshell the donor makes a current tax-deductible contribution to a DAF at the LBF then decides at a later date how to distribute the funds to ministry. The donor may choose to distribute all of the assets or retain part for future distribution or to build a permanent endowment.
How It Works
Donor establishes account with Louisiana Baptist Foundation by completing the Donor Advised Fund Agreement. The account can be established in the name of the donor or in honor or memory of another person.
Donor contributes cash or securities to the account. Securities are converted to cash (if necessary).
Contribution qualifies as an income tax deduction in the year the contribution is made to the account. LBF provides tax receipt for donation.
Donor makes written recommendation at later dates for grants to be distributed to one or more charitable organizations.
LBF reviews recommendation(s), distributes funds to organization(s), and acknowledges the gift to donor and organization(s).
Donor may continue the fund beyond his or her lifetime by naming a successor to continue the grant recommendations; or the donor may designate any remainder of undistributed assets to be managed by LBF as a permanent endowment.
Benefits to Donor
Convenience: Donor may make a tax-deductible contribution for the current year while deferring the choice of beneficiary until a later date.
Donor can also make one asset transfer that can benefit multiple organizations.
Flexibility: Allows the donor input as to amount and timing of grants.
Professional Administration: Foundation manages and administers the account for reasonable management and maintenance fees.
Tax Savings: Donation qualifies as charitable deduction for income tax purposes. The Donor Advised Fund can also be used to reduce potential estate tax liability.
Anonymity: The Donor Advised fund can be used effectively when the donor would like to remain anonymous in support of ministry
For more information about Donor Advised Funds and other gift arrangements, please contact the Louisiana Baptist Foundation at 877.523.4636 or visit our website at www.LBFinfo.org.