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Donor-Advised Funds and the Gifting of Appreciated Assets

Updated: Apr 7



As noted in our 2020 post, groundbreaking Israeli tax regulations recognized donor-advised funds (DAFs), allowing JGive Giving Fund and Keshet Donor-Advised Fund to meaningfully expand their efficient platforms for charitable giving in Israel.


Briefly, a DAF is a recognized philanthropic entity established to manage and administer contributions to other charitable organizations. Structurally, DAFs provide a convenient, and flexible vehicle for charitable giving. 


Convenience: DAFs streamline the process of charitable giving by consolidating contributions to a single entity, simplifying record-keeping and administration.


Flexibility: Charitable giving via a DAF allows donors to separate their decision to maximize charitable tax deductions in a given year from the further disbursement of gifts  to the ultimate charitable beneficiaries over a longer period.


For instance, in a year when income is high, a large contribution can be made to the DAF. This should provide an immediate tax benefit for the entire gift and allow the donor to make informed donation decisions free of time constraints. 


In the US and other jurisdictions, tax regulations have long provided donors of appreciated assets tax benefits for the full value of their gift as well as a tax exemption on associated gains. The combined benefits of this attractive tax treatment and the flexibility of timing donations via DAFs have made DAFs a key mechanism for charitable giving.


Now in March 2024, the Israel Tax Authority has aligned with other countries in its treatment of donations of appreciated shares, allowing both capital gains tax exemption and a 35% tax credit for individuals, thereby increasing the flexibility and efficiency of local DAFs.


These are exciting developments for philanthropy in Israel, and we’re eager to watch our local DAFs continue to drive further growth and efficiency in Israeli philanthropy. 


Please see JGive Giving Fund and Keshet Donor-Advised Fund to learn more about charitable giving via a DAF.


Let us know if you’re interested in learning more about how DAFs or other charitable giving strategies can holistically fit into your overall financial plan. You can reach us at contact@maimonwealth.com.


 

Disclaimer


The information contained in this article has been provided for information purposes only. It does not constitute any form of advice nor recommendation to buy or sell any securities or to adopt any investment or tax strategy mentioned therein. It is intended only to provide observations and views of the author(s) at the time of writing, both of which are subject to change at any time without prior notice. The information contained herein is derived from sources deemed by MaimonWealth to be reliable but its accuracy and completeness cannot be guaranteed. This material does not have regard to specific investment objectives, financial situation, tax situation or the particular needs of any specific person who may read it. Any views regarding future prospects may or may not be realized. Past performance is no guarantee of future results.


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