Churches and religious organizations continue to be the primary beneficiary of all charitable giving in America.
Over the past few decades, donor-advised funds have become a popular tool for Christians to use for their charitable giving. The PCA Foundation has grown significantly over the past five years and much of the increase has flowed into its donor-advised funds.
What is a donor-advised fund?
A donor-advised fund is a fund you open with the PCA Foundation from which you make charitable grants over time. You can donate not only cash but also stocks, bonds, mutual funds, real estate, and more complex assets like your privately held business. You receive an immediate tax deduction because you have made a donation to a foundation that is itself a qualified 501(c)(3) charity. Then, you can make grant recommendations from your donor-advised fund to qualified end-user charities of your choice.
Why do Christians use donor-advised funds?
1. Donor-advised funds are simple to open and manage.
The PCA Foundation enables you to open a donor-advised fund online with a few clicks. Our Advise & Consult Fund® is free, which means 100% of your gift is available for distribution to your church and favorite charities.
2. Donor-advised funds enable you to give now and grant later.
Every December, Christians learn of more charitable needs and opportunities than they have time to consider. A donor-advised fund enables donors to give, receive a charitable deduction, and take time to decide how they want to distribute their charitable contributions. It isn’t unusual for Christians to receive bonuses or performance pay in December, or to experience other unusually large income events during the year. This typically means they eventually will make unusually large contributions to Christian charities, more than they want to make or can knowledgeably make all in the year of the income. But to achieve the maximum charitable deduction they must give in that year. A donor-advised fund allows them to give and deduct in the large-income year, but gives them time to prayerfully and carefully consider how and when God may direct them to grant out these resources to support worthwhile causes.
3. Donor-advised funds enable you to give on a schedule.
You can donate $25,000 to your donor-advised fund today, receive an immediate tax deduction, and then schedule your favorite charities to receive a gift on an established schedule. For example, you can direct a gift of $500 to Charity A, a gift of $250 to Charity B, and another gift of $250 to Charity C every month. Christians often use their donor-advised fund like a personal checking account, making automatic grants to their favorite organizations.
4. Donor-advised funds enable you to give anonymously.
Do you want to give a special gift to your favorite nonprofit without drawing attention to yourself? A donor-advised fund enables you to give anonymously. Every grant you make is sent out in the form of a check from the PCA Foundation. The memo line of the check can include or omit a reference to the donor who recommended the grant. A donor-advised fund is a great way to give in secret while retaining all the benefits of a charitable deduction.
5. Donor-advised funds can accept all types of assets.
Local churches and other charities that are not foundations typically are not equipped to accept assets other than cash gifts. If you possess public stock, or private S Corp stock or LLC or partnership units, real estate, or other complex assets, donor-advised funds are more accustomed to facilitating donations of such assets. They are able to accept cryptocurrency as well.
What are the different types of donor-advised funds?
The PCA Foundation offers three different types of donor-advised funds based on the desires and needs of donors.
- Our Advise & Consult Fund is our most popular fund. It has zero fees, which means 100% of your donation will be available for distribution.
- Our Increase Fund is for those who want to see their charitable gifts invested for market growth. You can even pick the investment strategy for your fund. The funds will be invested and open to market gains. There are charges associated with this fund.
- Our Single Charity Fund is primarily designed for those who desire to make a qualified charitable distribution (“QCD”) from their IRA, but can serve other purposes as well.
You can go online today and open your donor-advised fund with the PCA Foundation.