How You Can Give to Charity Like a Billionaire Lane Anderson - Chronicle Independent
go to original February 8, 2015

Kim Laughton, president of Schwab Charitable, on why investors and advisers sought out donor-advised funds in 2012 at a steady clip. (InvestmentNewsEvents)

Not everyone can shell out millions to a good cause like Bill Gates, Warren Buffett, and Mark Zuckerberg. But that's changing, thanks to the explosive growth of donor-based funds, a kind of personal foundation for the average person.

Last year, 44 wealthy donors gave gifts to charities of $50 million or more. But Fidelity Charitable, the largest donor-based fund, granted $2.6 billion to 92,000 charities. That's an impressive chunk of change, and an impressive impact, from givers who aren't famous millionaires. Contributions to donor-advised funds topped $17 billion in 2013, an all-time high.

Donor-advised funds allow ordinary people to set aside money and get immediate tax benefits. The money can't be taken back, but it can be doled out when and where the giver chooses, similar to the way that large foundations work for the super rich, according to Time Money.

...An individual can open a donor-advised account for $5,000 at Fidelity Charitable or Schwab. The account owner immediately receives the maximum IRS deduction, but can shell out the money at his or her discretion. In the meantime, the account accrues interest tax-free. Most of these accounts are modest by millionaire standards, with balances below $25,000, and 90 percent, are gifted within a decade to charity, according to Fidelity.

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