Flatbush, Brooklyn
A Fund For All Seasons: Centralize Your Giving To Optimize Tax Benefits
When the Inflation Reduction Act was signed into law in August, many taxpayers were relieved that the Act did not include heavily-debated proposed tax hikes that were so prominent in early versions of the legislation. What is weighing on taxpayers’ minds, however, even more heavily than the few changes to income tax rules, is the Act’s $80 billion in funding increases for the IRS. The IRS will use the money to shore up its staffing, technology, and, its general capacity, meaning that their customer service should improve, and that audits may increase as well.
Taking a leaf out of the IRS’ book, it’s always a best practice to keep complete, accurate, and up-to-date tax records, with special care given to tracking your charitable giving. Establishing a fund at Brooklyn Community Foundation is an easy way you can organize and track your charitable giving in one place. Once established, you and your family can optimize your tax benefits by making a single, tax-deductible transfer of highly-appreciated stock each year to your fund.
If you are already deploying this tax-savvy technique, you know that the proceeds from the sale of the stock — free from capital gains tax — are then used for distributions from your fund to support your favorite charities. No matter how many different charities receive support from your fund, you still have just one receipt to keep track of charitable donations for income tax deduction purposes, simplifying and centralizing your giving.
At Brooklyn Community Foundation we offer multiple fund options for different types of giving, and our donor services team can work with you to set up a fund to meet your specific needs and charitable giving goals. In fact, our community of fund holders even includes some donors who have established two or more different types of funds to fulfill their different goals.
We can help you establish various types of funds, including:
Donor Advised Funds |
A Donor Advised Fund enables you to establish a dedicated account for charitable giving. You make tax-deductible contributions of cash or other assets to your fund, and from there you can recommend grants to your favorite charities, at your own pace. Some of our fund holders focus their giving around a particular issue area such as access to education, or specific communities, by investing in Black lives or supporting creatives on the path to entrepreneurship. Still others choose to support a wide variety of causes and communities — with a classic Donor Advised Fund, the possibilities are endless. |
Field of Interest Funds |
If you would like to target your giving to specific areas of community need (such as education, older adults, the environment, or the arts), you can create a Field of Interest Fund to establish parameters for grantmaking under the ongoing guidance and expertise of staff at Brooklyn Community Foundation. |
Designated Fund |
A designated fund allows you to direct your giving to a specific nonprofit organization. Over time, the community foundation's staff manages the distributions from the fund according to the terms you’ve established. |
Tribute & Memorial Funds |
These fund options are an ideal way to honor the memory of a loved one or commemorate a life milestone, such as a wedding, bar mitzvah, or the birth of a child. There is no minimum to open a Memorial or Tribute Fund, and we can set up an online donation page on our website in order to collect contributions from friends and family. |
Giving Circles |
Giving Circles allow a group of like-minded donors to pool their resources in order to make high impact grants to organizations working in fields they care most about. At Brooklyn Community Foundation, we host Giving Circles for groups of five or more donors whose collective vision aligns with that of the Foundation. |
Each of these funds enables you to organize your giving for optimal tax purposes, which helps you stay prepared for annual tax filings. Whatever type of fund you choose, you’ll be in good company — our donor advisors gave $8.2 million from their funds in 2021 alone — and we would be proud to welcome you to our community of fund holders.
To learn more about Donor Advised Funds and how they can help you or your clients give with intention, contact our Donor Services team at donorservices@bcfny.org.
