Donor-advised funds, also known as charitable gift funds, allow you to make an irrevocable gift of cash or securities. As long as the securities have been held longer than one year, you’ll get an upfront deduction for their full value and no capital gains tax will be due.
Then you can advise the fund how to make charitable gifts with the money in your account, spreading your donations over years, if you wish. Any recognized charity (schools, religious organizations, etc.) may be a recipient.
Financial institutions such as Charles Schwab and Fidelity offer such funds; Vanguard’s fund, not surprisingly, charges fees that are about half the level of other funds.
In addition, many local community foundations also offer donor-advised funds. These community foundations may have lower fees but might expect a substantial portion of the donations to go to local causes.
