Charitable Giving, Donor-advised Funds vs. Private Foundations

Greetings all,

We at Bona Fide have been able to enjoy a bit of down time and now we are ready to stay busy for the rest of the year helping our clients succeed in all aspects of their lives. This newsletter will provide you with some context surrounding current interest rates. But first, a word from our sponsor…

If you haven’t yet, take a listen to our podcast, The FI Entrepreneur.  Here,  we will be spending some time digging into the how-tos of entrepreneurship and financial independence. We also are planning to interview a number of guests, so if you or someone you know is active in entrepreneurial or financial independence pursuits, please reach out and let us know!


November 1, 2022

Your Giving Vehicle

Donor-advised Funds vs. Private Foundations

Read

Giving feels good, right? And so does establishing the right giving vehicle to help you maximize your tax advantages. We want to share this article fromCharityvest about two common options that both offer strong tax benefits. Here, you’ll find a thorough overview and comparison of DAFs (donor-advised funds) and private foundations. There are many advantages to both, but each has different characteristics which should be considered when choosing the best option for your charitable giving. Something else worth considering is how to organize a charitable giving inclination with a plan. How much, and how to determine this figure is discussed in Flow- Financial Planning “How Much Money Should You Give to Charity?” Donating a percentage of  income, donating a percentage of wealth, or donating the equivalent of a budgeted category are a few ways to dive into it. Many also choose to make their contribution repetitive and consistent. However you decide to go about it, giving makes the world a better place. 

Listen

In this short listen by US In-Airit is explained why someone would establish a giving vehicle in the first place and how to organize this giving to sustain it for the future. With a DAF, the gift can be anonymous, but on the other hand there is more administrative work involved in a private foundation. You can see how these options vary, but are flexible in ways. Additionally, for a unique look on how to give, you may want to listen to The Value in Giving’s Podcast episode titled Maximizing Charitable Impact: Creative Giving Vehicles.

Watch 

Professor Russell James at Texas Tech University reviews the foundations of DAFs and PFs in this video with specifics on relative size, rapid growth, permanence, tax treatment, wealth name values, and more. If you’re looking for even more insight, Brad Rosley talks about Why Use a Donor Advised Fundfocusing on bunching deductions and avoiding capital gains as two key benefits. He shares his personal approach to DAFs and offers suggestions. Another great watch comes from James Conole at Root Financial Partners. His discussion on how to maximize the effectiveness of your gift while also taking advantage of the deductions you’re able to take from them focuses on preparing for a better financial future. 

Tips On Financial Investing, Vehicles, and Your Paycheck

This month, I’d like to highlight the following resources on investing, vehicles, and your paycheck cycle:

  • Read: Have you ever wondered what the benefit is of having a financial advisor for your investments, especially if you’re a do-it-yourselfer? This Vanguard client brief explains how financial advisors create value for investors.
  • Listen: Car leasing is the most expensive way to operate a vehicle. Car leasing is the cheapest way to operate a new vehicle. Both of those statements are true. In this podcast, Joshua Sheats explains why, and he explains how to get out of a lease if you have one.
  • Watch: Did you know that 80% of Americans live paycheck to paycheck? In this short video, Jesse Mecham provides several litmus tests for gauging which side of that percentage you fall into.

If you’re interested in meeting with me about any of these or other financial questions, let’s set up a time to talk!

Investment Portfolio Resources

This month, I’d like to highlight the following:

  • Read: This short article “Investment Shock Absorbers” from Dimensional communicates the need to diversify your portfolio and identify the right mix of investments, all of which helps you keep on track toward your investing goals.
  • Listen: In this podcast hosted by Meb Faber, he discusses “Why ‘Shareholder Yield’ Beats ‘Dividend Yield'”. Shareholder yield provides investors a more holistic perspective on the degree to which corporate managers are sharing profits with investors. This strategy has posted better historical returns than dividends alone. How much better? Listen to the podcast to find out!
    • Bonus Listen this month: YNAB has come out with a couple new jingles on budgeting and expenses. Treat yourself to the catchy tune Budget More!
  • Watch: Jon Stein, founder and CEO of Betterment, had a brief interview with Stephen Dubner, host of Freakonomics Radio, highlighting his findings from behavioral economic research about how to think outside the box and invest better.

This March newsletter is focused on investing; if you’d like to learn more about how I can assist you with putting together a great portfolio, set up a time to discuss this with me!