Charitable giving

Many of us succumb to a habit of checkbook charity, where we respond to seasonal mail solicitations or appeals for annual fundraising events. While these gifts are essential to the financial viability of non-profits, a strategic giving plan can maximize the lasting impact of your gift and can mitigate your tax burden, as well.

There are a variety of charitable giving vehicles that can reduce your taxable estate, provide income tax deductions and capital gains tax savings. Some options allow you to see the impact of your gift during your lifetime and others offer the added benefit of lifetime income. By discussing your charitable desires with your financial advisor and incorporating those goals into your financial plan, you can choose a giving vehicle that best suits your individual objectives, elevates your power of giving, and addresses your tax and financial needs.

Donor Advised Fund

A Donor Advised Fund may be a favorable charitable giving vehicle for a donor looking for a hassle-free way to make significant gifts over an extended period of time, while still providing a tax deduction in the current year. A Donor Advised Fund established through RJ Charitable offers the same advantages of a private family foundation, without the start-up costs, tax-reporting requirements, or administrative/legal expenses.

A $10,000 initial investment of cash or securities may be used to fund a new Donor Advised Fund with RJ Charitable and subsequent gifts of $500 or more may be made to the fund. The donor, or a donor’s designee, will advise which organizations will benefit from the fund, the timing and amount of charitable distributions, and how the funds will be invested.

Cash Gifts made to a Donor Advised Fund are fully deductible in the current year up to 50% of the donor’s adjusted gross income. For gifts of appreciated securities held longer than a year, the donor avoids paying long-term capital gains tax and still receives a deduction equal to the securities value on the gift date. The fully deductible amount for gifts of securities is limited to 30% of the donor’s adjusted gross income, but any excess may be carried over for up to five years.

Benefits of a Donor Advised Fund:

  • Ability to witness gifts’ impact on cause during donor’s lifetime
  • Benefits charity of donor’s choice
  • Gifts have the potential to grow
  • Reduction of taxable estate
  • Capital gains tax savings
  • Income tax deduction in current year

Charitable Gift Annuity

A Charitable Gift Annuity established through RJ Charitable is a split interest gift that benefits both charitable and non-charitable beneficiaries. The CGA will pay up to two annuitants, which may include the donor, income for life. The payout rate of a CGA is a fixed rate determined by the American Council on Gift Annuities based on the annuitant(s) age at the time of the gift. Upon the death of the last annuitant, the remainder of the assets will be either be passed directly to a charity of the donor’s choice or to a Donor Advised Fund.

A CGA may be established with a minimum gift of $50,000 of cash or securities and the CGA will provide an immediate partial tax deduction. For gifts of appreciated securities, CGA’s allow immediate capital gains tax to be avoided. Instead, the capital gains taxation will be spread out over the annuitant’s life expectancy.

Benefits of a Charitable Gift Annuity:

  • Fixed income stream for up to two annuitants
  • Reduction of taxable estate
  • Immediate partial income tax deduction
  • Capital Gains tax deferment
  • Benefits charity of donor’s choice

Pooled Income Fund

Similar to Charitable Gift Annuities, RJ Charitable Pooled Income Funds will pay out income for the lifetime of up to two annuitants and the remainder of the fund will be passed to a charity of the donor’s choice. Unlike Charitable Gift Annuities, the income payout from Pooled Income Funds is determined by the investment yield of the gift. RJ Charitable invests the gift for the donor and distributes 100% of the interest, dividends and other ordinary income to the named beneficiaries every month.

Pooled Income Funds may be a favorable choice for donors wishing to reinvest low-income, highly appreciated securities into an income producing vehicle, because Pooled Income Funds allow the donor to avoid paying Capital Gains Tax. A minimum contribution of $20,000 of cash or securities is required to establish a Pooled Income Fund and subsequent contributions of $5,000 or more are allowed.

Benefits of a Pooled Income Fund:

  • Variable income stream for up to two annuitants
  • Reduction of taxable estate
  • Immediate partial income tax deduction
  • Capital Gains tax savings
  • Benefits charity of donor’s choice

During our lives, we support causes that are important to us through the things we value most – our time, our talent, and our treasure. Our capacity to give our time and talents is limited by our lifetimes. But by discussing charitable giving options with your financial advisor and developing a thoughtful giving plan, your treasure can become a lasting legacy that will continue to provide support for years to come.


Donor Advised Fund: The Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value at $1.00 per share, it is possible to lose money in the fund. For more complete information, including fees and charges, please read the prospectus carefully before sending money. Consider the investment objectives, risks, charges and expenses of an investment company carefully. The prospectus contains this and other information and should be read carefully. Charitable Gift Annuity and Pooled Income Fund: You should consider the investment objectives, risks, and charges and expenses of mutual funds carefully. The prospectus contains this and other information about mutual funds. The prospectus is available from your financial advisor and should be read carefully. All investing involves risk and you may incur a profit or a loss. There is no assurance that any investment strategy will be successful. The foregoing information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of Matthew Apple and not necessarily those of Raymond James.

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