Saturday, April 2, 2016

Brooks on The Missing Tax Benefit of Donor Advised Funds

BrooksJohn R. Brooks (Georgetown University Law Center) recently published "The Missing Tax Benefit of Donor-Advised Funds," 150 Tax Notes 1013-1024 (2016).  Below is an abstract of Professor Brooks' article:

Donor-advised funds are often billed, by both their critics and advocates, as providing a preferred from of charitable donation relative to typical giving. This is because the tax law allows for a full deduction of the money or property contributed to the fund in the year of the contribution, even if the money does not go to operating charities until a future year.

In this report, I show that this feature of donor-advised funds does not actually provide an additional benefit over typical gifts of property to charities, and in many cases creates a tax cost. Furthermore, in some situations that do provide a modest tax benefit, most or all of that benefit is soaked up in fees by the donor-advised fund sponsoring organizations, such as Fidelity, Schwab, and Vanguard. Thus, donors need to better understand the potential costs and benefits of donor-advised funds.

TLH

https://lawprofessors.typepad.com/nonprofit/2016/04/brooks-on-the-missing-tax-benefit-of-donor-advised-funds.html

Publications – Articles | Permalink

Comments

Post a comment