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  • What You Need to Know: Donor-Advised Funds

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  • Donors

Hosparus Health has created customized giving strategies that enable donors to ensure their legacy of giving and maximize their contribution’s impact on our compassionate care — one of these giving strategies is a donor-advised fund. Often, it’s hard to understand these philanthropic terms and how they work, but we are here to help you through it.

What is a Donor-Advised Fund?

A donor-advised fund put simply is a personal investment account. The sole purpose of this account is to support the charitable organizations you care about. It allows you to make a charitable contribution, receive an immediate tax deduction and recommend grants from the fund over time.

It’s important to note that the account cannot be created at a bank, or directly with the charity you choose. It must be created at and maintained by a sponsoring organization. These organizations can be financial services firms like Fidelity, Schwab and Vanguard, or a community foundation. The sponsoring organization actively invests and manages the funds.

How does a Donor-Advised Fund Work?

Step 1: Select a sponsor and make an irrevocable contribution.

Step 2: Receive the maximum tax deduction.

Step 3: Name the account as well as its successors and beneficiaries. Successors are individuals who will take over the account in the event the donor passes away, and beneficiaries are the charities that will receive the remaining funds.

Step 4: The contribution is placed in the donor-advised fund account, where it can be invested and grow tax-free. You can contribute to the account at any point, as long as the minimum contribution amount required by the sponsoring organization is met.

Step 5: Recommend grants to qualified charities.

Benefits of a Donor-Advised Fund
  • Maximize tax benefits
  • Contribute immediately and donate when you’re ready
  • Grow your contributions over time, making more charitable dollars available to nonprofits
  • Create a charitable legacy
  • Choose how you are acknowledged

A donor-advised fund is just one of the many ways that you can leave your legacy of giving and impact our care. To learn more about planned giving, contact Lisa Sanford at lsanford@hosparus.org or 270-304-2329.

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