We are grateful that many attorneys, accountants, and financial advisors reach out to Hudson Community Foundation (HCF) as a resource when the topic of philanthropy surfaces during client meetings. We are here to support the important tax and estate planning objectives you’re establishing for your clients and, at the same time, help your clients achieve their goals for supporting the community causes they love.
An important part of serving you and your clients is HCF”s dedication to keeping up with laws and regulations that could impact the charitable planning advice you provide. Recently, donor advised funds and the rules governing these vehicles are topics that are popping up more frequently in financial and even mainstream media. We are closely watching these regulatory developments.
You’re likely aware that in November 2023, the Internal Revenue Service issued proposed regulations that would change the way donor-advised funds are defined and how they operate. The transcript from the IRS’s public hearings in early May, were inspiring to see so many community foundation leaders share their recommendations that any new regulations should not disrupt the positive and productive working relationships between community foundations and advisors who are helping their clients achieve philanthropic goals through the community foundation. At this point, no one can predict what will happen with the proposed regulations–whether and how they will be revised or when they might become effective, if ever. As always, we are staying on top of the issues.
As you track the issue, remember that a donor-advised fund is just one of many types of funds your clients can establish at Hudson Community Foundation. Certainly, the donor-advised fund is popular because it allows your client to make a tax-deductible transfer of cash or marketable securities that is immediately eligible for a charitable deduction. Then, the client can recommend gifts to favorite charities from the fund to meet needs important to them. Other types of funds at HCF can be just as effective as a donor-advised fund depending on the client’s objectives. Field-of-interest funds and unrestricted funds, for example, allow your client to tap into the expertise of the community foundation team to ensure that the client’s legacy continues for generations, even as community priorities change over time.
A major advantage of designated funds is that they are eligible recipients of the popular and tax-savvy planning tool called the Qualified Charitable Distribution, or “QCD,” available to your clients who have reached age 70 ½. A QCD enables a client to direct up to $100,000 to a qualified charity (including some types of funds at the community foundation) without including the $100,000 in the client’s taxable income for the year.
We look forward to helping you serve your charitable clients regardless of where the proposed regulations ultimately land. And we’ll keep you posted!
We welcome conversations to help donors give to their favorite causes. Hudson Community Foundation enables simple, smart, and meaningful family philanthropy. Although HCF is a public charity, it does not promote one charitable cause. Rather, HCF is committed to expanding the capacity of family philanthropy – no matter where you live.
Read more about Donors Guide to Donor Advised Funds.
With a fund at Hudson Community Foundation (HCF), advisors can manage the charitable assets on their preferred platform at any amount. Assets stay under your management. You can provide your clients with the consistent investment advice they expect. We are your partner in charitable giving!
The team at HCF is a resource as you serve your philanthropic clients. We understand the charitable side and are happy to serve as a secondary source as you manage the primary relationship with your clients. This blog is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.
