Donor Advised Charitable Fund

Richard B. Dawson, CPA Craig M. Pike, CPA
David E. Smith, CPA Patricia S. Hodgdon, CPA
Eric A. Purvis, CPA/ABV, MST, CVA Jeremy S. Handlon, CPA
Joel H. Bassett, CPA/PFS, CMA, CIA Michael P. Kelly, CPA
Kirk J. Purvis, CPA, CFERyan W. Dawson, CPA
William H. Souter, CPA, MSTJeffery W. Hicklin, CPA
Adam P. Johnson, CPA

December 21, 2017

Dear Client and Other Friends,

A Donor Advised Charitable Fund is established by an organization, including the Maine Community Foundation and many investment firms. The fund allows you to contribute cash or securities and receive an immediate tax deduction. Over time, you decide how and when the funds are distributed to qualified charities.

Historically, Donor Advised Charitable Funds required large up front contributions, had high operating costs and limited your ability to make small charitable gifts. However, these barriers have been reduced or eliminated and are attractive to taxpayers making the level of donations you have been making. Many donor advised funds require a $5,000 opening contribution of cash or securities and subsequent contributions have no minimum. You are allowed to make charitable gifts to qualified charities for as little as $50.

The benefits of a Donor Advised Charitable Fund are numerous including the following:

 You control when you claim your tax deduction by deciding when to contribute to the fund. You no longer need to match your tax planning with the numerous requests for charitable giving.

 The recordkeeping is minimized because you can make a single donation to the charitable fund so at tax time you no longer need to find the numerous charitable acknowledgments.

 You will never lose track of charitable gifts because the tax deduction is obtained when the contribution is made to the fund.

 You can contribute appreciated securities held over one year and obtain a tax deduction for the value of the security without recognizing income from the sale of the security. We have often advised the use of appreciated securities when making sizable charitable gifts but it has been problematic when making smaller charitable gifts. A Donor Advised Charitable Fund eliminates this obstacle.

 With some Donor Advised Charitable Funds, you can contribute as little as $50 per donation and this can be done online, in person, by mail or phone. In addition, you can elect to make automatic donations to the charities you support on a regular basis.

 With some funds, you can access your account online and view your year to date giving, historical giving, a list of donations made and a breakdown by charitable purposes, such as arts and humanities, environmental and support services.

 The fund assets are invested in a variety of ways allowing you to increase the fund to create a family legacy.

 The charities often favor contributions from a Donor Advised Charitable Fund as opposed to marketable securities because the charity receives cash avoiding the need to liquidate the security.

Please contact us if you have any questions or want to discuss establishing a Donor Advised Charitable Fund.

Very truly yours,


15 Casco Street, Portland, ME 04101-2902
Tel: 207-874-0355 Fax: 207-874-0865