Donor Advised Gift Fund
Basics by the Hills Bank Wealth Management Group
What is a Non-Endowed Donor Advised Gift Fund? A Non-Endowed Donor Advised Gift Fund (the “DAGF”) is a charitable investment account that is opened in your name and that can be used for the sole purpose of making future donations to 501(c)(3) charitable organizations of your choice. “Bunch” Charitable Giving for Tax Benefits Under the current income tax code, many taxpayers are no longer able to itemize their deductions, including charitable donations. A DAGF allows individuals to “bunch” charitable giving in a single year in order to itemize their tax deductions for the “bunch year.” To the right are two examples – the first example is without the DAGF and the second example utilizes the DAGF:
Example 1: No DAGF Year 1: Taxpayer donates $4,000 directly to charities. Year 2: Taxpayer donates $6,000 directly to charities. Year 3: Taxpayer donates $8,000 directly to charities. Example 2: DAGF Year 1: Taxpayer funds the DAGF
with $18,000 cash and distributes $4,000 to charities from the DAGF.
Year 2: Taxpayer distributes
$6,000 to charities from the DAGF.
Year 3: Taxpayer distributes
$8,000 to charities from the DAGF.
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