Field-of-Interest and Designated Funds could be your year-end friends

As you plan for year-end giving, you may be considering transferring cash—or ideally appreciated stock—to your donor-advised fund. This allows you to maximize tax benefits while supporting your favorite nonprofits in Lorain County. A donor-advised fund can be a valuable part of your overall charitable giving strategy!

Think beyond donor-advised funds, especially as year-end approaches. The Community Foundation offers a wide range of funds to help you achieve your charitable giving goals while maximizing your tax and financial planning efforts.

Two excellent but sometimes overlooked fund types are designated funds and field-of-interest funds.

When you establish a field-of-interest fund at the Community Foundation, you allocate charitable dollars for a specific purpose. For instance, you might create a fund to support animal shelters, assist local organizations that help displaced families regain stability, or enable local historical societies to implement programs that celebrate the county’s diversity. With a field-of-interest fund, you can rely on the knowledgeable team at the Community Foundation to distribute grants in line with your vision. You also have the flexibility to name your fund—whether you choose to use your own name (e.g., Samuels Family Fund or Samuels Family Fund for the Arts), maintain anonymity (e.g., Maryville Fund for the Arts), or select a completely different name (e.g., Bettering Our World Fund).

A designated fund is an excellent choice if you already know which organizations you want to support in perpetuity. This option allows distributions to be spread over time, assisting organizations with their cash flow planning. It also enables you to potentially benefit from a larger charitable tax deduction in the year you establish the fund, especially if your tax rates are higher than usual that year. The designated fund agreement allows you to specify the organizations that will receive distributions according to a spending policy you select.

If you are over the age of 70½, consider opening a designated fund or a field-of-interest fund as year-end approaches. Unlike donor-advised funds, these two types of funds can receive “Qualified Charitable Distributions” from IRAs—up to $105,000 per person in 2024!