Charitable Accounts: Giving Back to the Community

I have always been an advocate for giving back to the community. There are many ways to get involved from giving money to volunteering time.

One of the more difficult aspects of donating money to many different charities is the tracking and book-keeping involved in giving. Setting up a charitable foundation for giving is expensive and time consuming. Now there is a better alternative.

Several major brokerage firms and community foundations now offer donor-advised funds often called charitable checking accounts. These accounts help disperse the funds and minimize the administrative headaches while enhancing your tax deduction reporting for the current year.

The donor-advised accounts can be set up to give cash, stock, or other assets to multiple charities. There are benefits to funding these types of accounts with appreciated stock; it allows the contributor to avoid large capital gain taxes on equities whose price has greatly appreciated. Currently, most contributors fund these accounts with non-cash assets.

Major brokerages such as Schwab and Fidelity support donor-advised funds often for minimums as small as $5000; the fund sponsors handle all of the administrative, legal, and accounting requirements for you.

One recent article provided a good summary of charitable donor-advised accounts.

'Charitable Checking Accounts' Make Giving Easy
http://finance.yahoo.com/expert/article/moneyhappy/55741;