Planning & Retirement
Charitable solutions comparison
Time to read: 3 min read
Compare various charitable giving vehicles to determine which option aligns with your giving goals and objectives.
| Planning considerations | Donor advised funds | Private foundation | Charitable remainder and lead trusts | Cash or check | Public Charity |
|---|---|---|---|---|---|
| Consider when | You want a simple solution with low costs and the potential to grow tax-free | You want to run your own organization, employ staff, or have greater flexibility in holding unique investments and grant making | You want a charitable vehicle that also benefits your heirs | You want to make one-off gifts or keep track of your own donation receipts | You have a desire to operate a nonprofit, delivering specific charitable programs to the public |
| Organizations you can give to | IRS-qualified public charities | IRS-qualified public charities (including DAFs); private foundations, other organizations, and individuals, subject to additional tax rules | IRS-qualified public charities (including DAFs) and, in most cases, private foundations | IRS-qualified public charities (including DAFs) and private foundations | Any organization or individual, so long as the expenditure is related to your charitable mission |
| Time to establish | Immediately | Several weeks/months | Several weeks/months | Immediately | Several weeks/months |
| Typical minimum | $5,000-$10,000 | $1 million+ | CRT: $100,000+** CLT: $1 million+** | Any | Dependent on your mission and goals |
| Costs to establish | X | ✓ | ✓ | X | ✓ |
| Ongoing fees/costs | ✓ | ✓ | ✓ | X | ✓ |
| Growth potential | ✓ | ✓ | ✓ | X | ✓ |
| Donations of non-cash assets | ✓ | ✓ | ✓ | N/A | ✓ |
| Income tax deduction (as a % of Adjusted Gross Income)* | 60% for cash 30% for appreciated assets | 30% for cash 20% for appreciated assets | Depends on the type of trust and type of organization being supported | 60% when donating to a public charity 30% when donating to a private foundation | 60% for cash 30% for appreciated assets |
| Administrative responsibilities | X Recommend grants to favorite charitable causes; DAF sponsor handles all administration | ✓ Govern and manage organization, including managing grants, investments, and legal/tax compliance | ✓ Trustee must administer trust, including managing trust distributions, investments and legal/ tax compliance | X | ✓ Govern and manage organization, including carrying out charitable programs and managing investments and legal/tax compliance |
| Tax on investment income | X | ✓ 1.39% of net investment income | CRT: X CLT: ✓ | N/A | X |
| Required annual distributions | X Typically no, but can vary by DAF program sponsor | ✓ At least 5% of net asset value | ✓ CRT: at least 5% of market value or initial trust value CLT: no required minimum | N/A | Ordinarily none (but must carry out charitable activities) |
| Required to file its own tax return | X | ✓ | ✓ | N/A | ✓ |
| Give anonymously | ✓ | X | ✓ | X | X |
| Ability to name successors | ✓ | ✓ | ✓ | X | ✓ |
| *Assumes appreciated assets are long-term capital gain property. **Corporate trustees typically have account minimums over $1 million for administration of these accounts. |
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To learn more about your charitable giving options, contact your financial advisor.
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