FAQ: How does a charitable giving fund work?

Mar 30, 2021 | What's the Buzz

While the inner workings of B Charitable are complex, the basics of your Charitable Giving Fund are quite simple. After you sign up for free, you can easily make non refundable, tax-deductible contributions to your Charitable Giving Fund at times or on a schedule convenient for you. You can then choose to request grants to registered charities immediately or allow your fund to grow using tax free investment avenues and make grant requests at times that are most impactful to the public charities you support the most. Additionally, once you begin to use your Charitable Giving Fund for all of your charitable giving, you are still supporting the charities you desire, but you receive one consolidated contribution receipt at the end of the year for your tax preparation.

We refer to this tool as a Charitable Giving Fund. The IRS calls it a donor advised fund. According to the IRS, a donor advised fund is “a separately identified fund or account that is maintained and operated by a section 501(c)(3) organization, which is called a sponsoring organization. Each account is composed of contributions made by individual donors. Once the donor makes the contribution, the organization has legal control over it. However, the donor, or the donor’s representative, retains advisory privileges with respect to the distribution of funds and the investment of assets in the account.” Traditionally, the donor advised fund has been a tool of the wealthy with a high cost of entry and operation. One of the primary goals of B Charitable is to unlock the power of the donor advised fund for everyone, even you. With no minimum contribution requirement, investment growth, and one simple tax receipt, changing the world doesn’t get much easier than this. 


Benefits of your Charitable Giving Fund


    • Easily contribute funds with one-time or recurring contributions. With just a few clicks, you can make contributions to your fund and set up automatic, recurring contributions with either your card or through ACH transfer.
    • Maximize your potential Tax benefits. B Charitable is a nonprofit corporation recognized by the IRS as a public charity. Contributions to your Charitable Giving Fund are non refundable, charitable contributions. As such, contributions to your fund are tax deductible immediately, no matter whether you request that they be granted to other charities immediately or later.


    • Invest donations for tax-free growth. If you plan to maintain a balance in your Charitable Giving Fund, you may grow that balance through different investment tools. This investment growth, like the balance of your fund, can ONLY be distributed to other public charities. As such, the growth is tax-free and provides a great way to increase the impact of your contributions.


    • Simplify your books with a single account and tax receipt. Easily keep track of every contribution to your fund and any grants you request to charity with one, single tax receipt. You no longer need to keep track of every donation made to charity, just the single receipt from your Charitable Giving Fund contribution.


    • Leave a legacy of generosity. B Charitable makes it easy to be intentional with your charitable giving, increasing your impact through the course of your life. B Charitable also gives you the opportunity to name a successor donor(s) on your Charitable Giving Fund. Successor donors assume all privileges after the death of the last account holder, providing an opportunity for your meaningful charitable legacy to be continued.