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Align your giving vehicles.

A Schwab Charitable™ donor-advised fund account can enhance your overall charitable giving strategy, whether used alone or in conjunction with a private foundation, charitable gift annuity, or trust. Each tool has different features and benefits, so it’s best to consult with your financial advisor, CPA, or attorney about your specific situation. To get you started with those conversations, consider these three important questions:

  1. Are you concerned about cost, tax liability, or grant-making limitations?

    Private foundations differ from donor-advised fund accounts in a number of ways:

    • Cost and complexity to establish and operate
    • Tax considerations
    • Grant-making support and requirements
    • Investment management
    • Your involvement and privacy

    Donor-advised funds can be an effective stand-alone solution or can complement private foundations for donors who want to maximize their tax deductions, maintain a desired level of privacy, allow for flexibility of grant timing, facilitate granting outside of their foundation’s mission, and engage future generations.

    Learn more about how a donor-advised fund can work with your foundation.

  2. Is guaranteed income important?

    Donors can create a charitable gift annuity or charitable remainder trust through an irrevocable transfer of cash or other property. Both of these can work in combination with a donor-advised fund account to add flexibility in granting and help establish a legacy.

    A charitable remainder trust (CRT) is formed by a gift of cash or other property to an irrevocable trust. The donor receives an income stream from the trust for a term of years or for life, and the named charitable beneficiary receives the remaining trust assets at the end of the trust term.

    A charitable gift annuity (CGA) is a contract under which a 501(c)(3) qualified public charity, in return for an irrevocable transfer of cash or other property, agrees to pay the annuitant(s) a lifetime income. The maximum number of annuitants is two, and payments can be made to them jointly or successively. The charity will determine the payout amount based on actuarial factors. Unlike a CRT gift, part of a CGA gift may be used immediately by the charity, with the remainder of the gift invested in an account to provide for the annuitant’s income stream.

    Learn more about charitable remainder trusts and charitable gift annuities.

  3. Is reducing gift or estate tax important?

    For donors who want to support charitable causes during their lifetime while enjoying gift and estate tax savings, naming a donor-advised fund as the lead beneficiary for a charitable lead trust may be a good option.

    A charitable lead trust (CLT) is a gift of cash or other property to an irrevocable trust. A named charity receives an income stream from the trust for a term of years. Depending on how the trust is structured, the donor enjoys a current income, gift, or estate tax deduction on the assets donated to the trust. After the income stream period ends, the remaining assets are distributed to the non-charitable beneficiaries.

    Learn more about charitable lead trusts.

Related articles

  • Charitable remainder trusts (CRTs) give donors the opportunity to receive both an income stream over the course of their lifetime and a current-year tax deduction, while making a substantial future gift to charity.

    Read more about charitable remainder trusts

  • Charitable lead trusts (CLTs) involve a gift of cash or other property to an irrevocable trust. A named charity receives an income stream from the trust for a term of years, and the remainder goes to the non-charitable beneficiaries.

    Read more about charitable lead trusts