Benefits of Donor-Advised Funds and Why Now is a Good Time for Charitable Giving


While 2016 has had its ups and downs, things are looking optimistic in regards to giving. In an interview with RIA Channel’s Julie Cooling, President of Schwab Charitable, Kim Laughton, discusses the Schwab Charitable donor-advised fund and why 2016 looks to be a year for giving.

According to Laughton, high giving percentages result from a number of factors including stock market performance and taxes. The market has done well in 2016, so it is anticipated that investors will be more willing to give. In an effort to offset capital gains, wealthy clients are interested in locking in gains now. By the end of 2015, giving was up by 4% and is anticipated to be even higher by the end of 2016.

Schwab Charitable is a donor-advised fund managed by Schwab that can be characterized similar to IRAs or 529 plans by allowing clients to put aside money over a period of time to be donated to charity. The fund is unique in that it accepts securities and allows clients to contribute cash, appreciated assets or investments without paying a capital gains tax.

Benefits Of Donor-Advised Funds And Why Now Is A Good Time For Charitable Giving

When compared to a family foundation fund, Schwab’s donor-advised fund is lower cost, more efficient and can also be used in conjunction with or as a substitution for family foundation funds. While family foundation funds tend to have higher asset levels and are mandated to give out 5% each year, Schwab Charitable does not have such regulations and does not require a separate account. Since the fund typically has lower costs, it is more appealing to clients who have less to give.

Schwab Charitable currently has 1,600 advisors using the Schwab Charitable platform and has granted more than $1.2 billion. Schwab Charitable accounts can also be opened at any financial services company or community foundation. To learn more about why 2016 is anticipated to be a great year to give, visit www.schwabcharitable.org/public/file/P-9808054.

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