If you are in the financial position to give money, one method you might consider is using a donor-advised fund. It lets you donate money to a charity of your choosing, with immediate tax benefits. Here are some steps to take when using one of these accounts for charitable donations.
Select Charities You're Passionate About
There aren't too many limits on the charities that you can donate to when contributing to a donor-advised fund. That opens up your contributing efforts to a lot of avenues, but to feel good about these donations, think about charities you're passionate about.
What programs do you think need your donations the most? Or, maybe there's a charity you grew up close to, and that might be the best selection. You don't have to decide at the time you contribute to the donor-advised fund, but eventually, you'll need to make a selection.
See What Restrictions are in Place
So that you have clear expectations of how to use a donor-advised fund and how it will benefit you from a tax standpoint, look at restrictions that are in place before ever contributing to this account.
How much can you contribute to this account and what tax deduction limitations are there? You can speak to a donor-advised fund advisor to learn more about these intricacies. Then you can do a better job at using these accounts appropriately and learning how they're supposed to work.
Be Careful About Selecting a Donor Sponsor
When you contribute to a donor-advised fund, it won't go to the charity of your choosing immediately. Instead, it will sit with a donor sponsor. Since this party has an important managerial role over these funds, make sure you choose this party wisely.
Find a sponsor that is legitimate and legally able to hold onto charitable donations that end up in these accounts. You can get professional recommendations too so that you don't have to worry about what will be done with the money once it is time to transfer the funds over.
Donor-advised funds are meant to help out all sorts of charities. If you're in the position to use one of these funds, take your time seeing how it's structured and what regulations you need to comply with early on. Then you'll enjoy stress-free donations that lead to meaningful tax donations pretty quickly.
For more information about donor-advised funds, contact a local advisor or sponsor.