The passage of the Tax Cuts and Jobs Act led to furious speculation by philanthropists concerned with the new law’s impact on charitable giving. After much ado, the consensus appears to be that the law will have both positive and negative implications for private foundations and donor-advised funds. Given the increase to the standard deduction and the loss of other popular deductions, some in the charitable community are worried that giving in the upcoming years will decline. Though some charities have expressed concern, Ann Gill, Vanguard Charitable’s chief philanthropic officer, believes that donors “will be more thoughtful in planning their giving.” The use of a donor-advised fund allows charitable givers to transfer lump sums of money to a preferred fund and spread their donations over time. Using this method, a donor may find it worthwhile to itemize his deductions in certain years, though he may still want to take the standard deduction in others. Gill notes that for “individuals taking this approach, a donor-advised fund can be used to ensure constant support for favorite charities, even when the charitable deduction is only taken in certain years.”
See Karen DeMasters, Philanthropy in the Post-Tax-Overhaul World, Financial Advisor, February 1, 2018.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.
