Fidelity Charitable Ends DAF Account Minimums

Donor-advised funds provide several tax benefits for individual donors, including immediate tax deductions for their donations before those funds are distributed to any charity, deductions for securities and other appreciated assets and a five-year carry-forward for unused deductions.

In addition, no capital gains tax is incurred on gifts of appreciated assets, DAFs are not subject to estate taxes and investments in a DAF grow tax-free. 

Once donations are made to a DAF, however, the fund, not the donor, takes control of the money, although the donor can direct what charity receives their donations. The fund charges an administrative fee of $100 or 0.6%, based on account balances plus investment fees ranging from 0.015% to 0.99%, depending on the investment funds chosen. 

Through early May, total grants from Fidelity Charitable topped $2.5 billion, up 18% from the previous year, including more than $236 million targeting nonprofits' response to the COVID-19 pandemic. Since its inception in 1991, Fidelity Charitable has provided more than $42 billion in grants to over 300,000 nonprofit organizations.

— Related on ThinkAdvisor:

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• Help Your Clients Boost Charitable Giving With Complex Assets