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Spread your giving over time

By Dan Kadlec, contributing editor


BILLIONAIRES: Have fancy foundations.

YOU: Can open a donor-advised fund to spread your giving over time.

The ultrarich love the prestige of foundations, and the tax benefits don't hurt either: Foundation benefactors get giant upfront tax deductions, plus the ability to keep making charitable gifts for years to come. You can get many of the same benefits with a donor-advised fund.

Brokerages such as Vanguard, Fidelity, or Schwab offer donor-advised funds, or you can set one up through a religious group, university, or community foundation, which is a nonprofit or trust that pools the money from many donor funds to support local charities.

When you open an account -- $5,000 to $10,000 is typically the minimum you can take an immediate tax deduction for the full amount of your gift. The money then grows tax-free, and you direct the fund to donate on your behalf whenever you like.

Brokerage-based funds tend to have the lowest fees and minimums and the widest selection of charities you can support (see the table above); a community foundation will offer more advice and know about local needs, says planner Benton. You can find community foundations in your area at the Council of Foundations website, cof.org.

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