Tax Advantages of Opening a Fund

Opening a fund at Lodi Community Foundation is a meaningful way to support the causes you care about while also receiving valuable tax benefits.
As year end approaches, many donors look for smart ways to maximize their charitable impact and annual tax deductions. Establishing or contributing to a fund at LCF allows you to receive an immediate charitable tax deduction in the year your gift is made, while recommending grants to nonprofits over time.

To be eligible for a charitable deduction this tax year, gifts must be received and processed by December 31. If you are planning to give appreciated stock, real property, or other complex assets, we encourage you to reach out early so we have time to coordinate transfer details.

Tax Smart Giving

• Receive an immediate tax deduction in the year your gift is made
• Deduct cash gifts
• Deduct appreciated assets held more than one year
• Avoid capital gains tax on appreciated assets you donate
• Grow your charitable dollars tax free in one of our investment pools (you can grant out more to charity over time than you contribute through one of our investment strategies)
• Simplify your record keeping with one consolidated tax receipt
• Many donors also use a fund to “bunch” charitable contributions into one tax year to maximize deductions while distributing grants over time
• Avoid the legal formation, administrative burden, annual tax filings, excise taxes, payout requirements, and ongoing compliance obligations required of a private foundation

LCF is a 501(c)(3) nonprofit organization. Donors may receive a tax deduction to the full extent allowed by law, subject to IRS guidelines and applicable Adjusted Gross Income limitations.

Ways to Give

• We can accept a variety of assets, including:
• Cash
• Appreciated stock and mutual funds
• Real property, upon approval
• Other complex assets
• Establish a legacy fund through your will or trust to create lasting support for the causes you value for generations to come

Our team is here to work with you to clarify your charitable goals and explore effective ways to give during your lifetime and beyond. You can take this information back to your tax or financial professional to help ensure the most favorable tax strategy for your situation and that your philanthropic wishes are thoughtfully in place, so you can rest easy knowing it is taken care of.

We are honored to partner with you in creating meaningful impact in Lodi and throughout our region today and for future generations.

If you are considering starting a private foundation, or already have one and are thinking about its long term future, a fund at a Community Foundation may be the right charitable vehicle for you. Through a Donor Advised Fund, Field of Interest Fund, or Designated Fund, you can maintain or even enhance your impact while eliminating the legal requirements, administrative responsibilities, and costs associated with establishing and maintaining a private foundation.

The chart below provides a comparison overview of key considerations when evaluating a Private Foundation versus a Fund at a Community Foundation. If you would like to focus on growing and deploying your charitable dollars while avoiding legal formation, annual tax filings, excise taxes, payout requirements, and ongoing compliance obligations, let’s talk. Contact us and a member of our team will follow up to answer your questions and discuss your goals so you can take the next steps with clarity and confidence.

Let us handle the work so you can focus on what matters most: honoring your family legacy and supporting the causes and community you care about most.