He added the minimums are very reasonable for the investments and donations. Plus, Glovsky said he never seems to have to have conversations with his clients about performance with these investments.
What About Foundations?
In describing donor-advised funds, Brosnan said, "They are a smart man's private foundation." Private foundations require tax filings and managing them is time consuming, they said.
Glovsky added that accountant fees for foundations can be comparable to the expenses of a donor-advised fund.
Still, the group agreed, private foundation can be the right solution for the right family.
Opportunities For Giving Complex Assets
An interesting benefit of donor-advised funds is that non-publicly traded assets can be given to charities. Boland said this planning tactic can make a dramatic difference in tax planning. Complex assets, like certain real estate and limited partnership interests, may be a good fit for this type of donation, as they usually have a low cost basis. With likely increases in fair market values, donors can avoid some significant capital gains exposure.
Glovsky added that donor-advised funds have be helpful when his clients have inherited stock with no idea of what the basis is. Rather than make up a value, sometimes it is easier to donate it. He joked that he tells his clients, "You can avoid the capital gains or just die with it."
Mike Byrnes founded Byrnes Consulting to provide consulting services to help advisors become even more successful. His expertise is in business planning, marketing strategy, business development, client service and management effectiveness, along with several other areas. Read more at www.byrnesconsulting.com.