A Comparison of Charitable Giving Vehicles
This eight-page paper compares six charitable giving approaches: donor-advised funds, private foundations, charitable gift annuities, charitable remainder trusts, charitable lead trusts and direct gifting.
Who Should Read This Piece:
- Individuals interested in optimizing tax efficiency, control and, if desired, an income stream in their charitable giving
- Attorneys, financial advisors and other professionals who have clients with philanthropic giving needs
- Trustees of private foundations and other nonprofit entities
Download Our Article and Receive:
- A flow chart and description of how each giving approach operates
- Access to a video discussion of the material
- An explanation of the advantages and limitations of each
- A table comparing the approaches across six dimensions
Excerpt from the paper:
A charitable gift annuity enables a donor to make a gift to a nonprofit organization while creating an income stream to the donor or others over the individual’s lifetime. These vehicles are created through a contract in which a charity agrees to pay the donor or another beneficiary an annual sum of money for life in exchange for a donation of cash or other assets. The amount of these annuity payments will depend on the age of the person receiving the annuity and the amount of the original gift, and becomes a fixed obligation of the charity. Thus, neither later market conditions nor investment returns will change the payment amount. Generally, for this type of gift, the amount eligible for the donor’s income tax charitable deduction is the difference between the fair market value of the assets donated and the value of the annuity contract.
About Fiduciary Trust:
Fiduciary Trust Company is a privately-owned wealth management firm focused on families, individuals and nonprofits seeking objective advice to help grow and protect their investments. The firm also provides a range of services to professional financial advisors and single-family offices. Fiduciary’s capabilities include customized wealth planning, investment management, trust and estate services, and family office, tax and custody services.
Fiduciary Trust has been named “Best Independent Trust Company” by Family Wealth Report, and its affiliate, Fiduciary Trust of New England as been recognized as a "Most Advisor-Friendly Trust Company" by Wealth Advisor.
Founded in 1885 as a family office, Fiduciary takes a personal approach based on expertise, strong performance and a genuine commitment to act in its clients’ best interests. The firm’s client focus has enabled it to achieve a 98% annual client retention rate for decades.
About the Authors:
Todd H. Eckler is the Executive Director of Fiduciary Trust Charitable, an independent nonprofit which enables donors to access flexible, advisor-managed donor-advised funds. In addition, he is the Chief Marketing Officer of Fiduciary Trust Company and a member of the firm's Senior Management Committee. Before arriving at Fiduciary Trust Company, Todd served in leadership positions at Bank of America Merrill Lynch, including Chief Operating Officer and Head of Marketing roles within Global Wealth Management and Global Banking Marketing. Prior to Bank of America, he was a Senior Vice President at Fidelity Investments and a Senior Partner at the global strategy consulting firm Monitor Group. Todd received an AB in economics from Dartmouth College and earned an MBA from Harvard Business School.
Kelly J. Guarino is Vice President & Trust Counsel at Fiduciary Trust Company, provides trust administration and estate planning advice for clients in collaboration with Fiduciary’s investment officers and clients’ outside estate planning counsel For more than a decade, Kelly was an attorney at Lourie & Cutler where she advised families and organizations on tax, trust and estate planning issues, and also counselled nonprofits on issues relating to formation, governance and operations. Her professional experiences also include WilmerHale, Testa, Hurwitz & Thibeault, and Peabody & Arnold. Active in the nonprofit community, Kelly has served as Co-Chair of several Massachusetts Continuing Legal Education conferences focused on nonprofits, including the 2018 Annual Nonprofit Law Conference, and for the past six years has been the presenter of “Private Foundations: Rules of Behavior” for the Boston Bar Association. Kelly received a BA in political science from the University of Utah and a JD from Harvard Law School.