Tax benefits & giving strategies: A Donor Advised Fund with JCF

In a year filled with challenges, charitable giving has been a source of unity and resilience, particularly for the Jewish community expressing support and solidarity in response to the October 7th attack.

Israel-related causes saw a surge in donations, with much of the aid directed to those impacted by the war. In the first six months after the Hamas attack, organizations and individuals donated over $1.4 billion toward Israel’s recovery, according to Israel’s Ministry of Diaspora Affairs.

“In the wake of October 7th, we saw the true power of collective giving,” said Rachel Schnoll, CEO of Jewish Communal Fund (JCF). “Donors responded with incredible generosity to support Israel and combat antisemitism, demonstrating their commitment to their longstanding charitable priorities and our community’s urgent needs.”

JCF is the nation’s largest and most active Jewish donor advised fund (DAF) — a charitable giving vehicle that enables donors to streamline their philanthropy, maximize the impact of their investments, eliminate the stress of tracking receipts and achieve immediate tax advantages.

With the end of the year approaching, now is an ideal time to consider the benefits of a DAF. DAFs offer a simple way to meet end-of-year tax deadlines while simplifying the giving process.

How DAFs Work:

A DAF allows you to receive an immediate tax deduction when you contribute funds, while giving you the flexibility to decide which charities to support and when. With a minimum opening contribution of $5,000, you can donate a variety of assets and realize tax advantages for the current year. JCF handles all record-keeping, eliminating the need to track receipts. You can make grants to any IRS-approved charity.

Advantages of a DAF:

• Capital Gains Savings: Donate appreciated stocks to avoid capital gains taxes and maximize your charitable deduction. For example, if you purchased stock for $10,000 that has grown to $50,000, you can donate the stock directly through a DAF, avoid capital gains tax on the $40,000 profit, and claim a $50,000 deduction. You can also donate other assets like real estate through your DAF.
• Strategic Giving: By “bunching” (combining several years’ worth of donations into a single contribution), you can surpass the threshold for itemizing deductions, optimizing your tax benefits while maintaining control over your giving.
• Building a Legacy: Involve younger generations in philanthropy. JCF allows parents or relatives to open funds for young adults (ages 18-30) with an initial contribution of $1,800. Many fundholders are second or third generation with JCF and continue to pass down their legacy of giving.
• Immediate Response: Respond quickly to emergencies like natural disasters or humanitarian crises. With funds readily available in your account, grants can be issued quickly and reach charities within days.

Why choose Jewish Communal Fund?

Founded over 50 years ago, JCF is the largest Jewishly affiliated DAF in the United States, managing $3 billion in charitable assets for over 4,900 funds.

In the year following October 7, JCF donors gave $148 million to Israeli causes, a 35% increase. Fundholders directed funds to urgent needs like emergency medical care, mental health services, and rebuilding efforts. JCF fundholders increased their giving, granting over $1 billion to more than 11,000 charities.

JCF actively supports the global Jewish community through initiatives like its Special Gifts Fund, which has financed kosher food pantries, Jewish summer camps, and services for Holocaust survivors, in addition to significant contributions to UJA-Federation of New York. JCF also offers Jewish values impact investments including Israel Bonds, JLens, VanEck Israel ETF, HFLS and Ogen Impact Loan Programs. 

JCF provides expert guidance and resources to help donors make informed decisions. 

“We welcome donors at all levels,” Schnoll said. “Starting a DAF is a simple yet powerful way to embark on your philanthropic journey.”

JCF offers a seamless, secure platform for contributing to IRS-approved charities.

Jewish tradition views tzedakah not just as an act of kindness but as a sacred obligation. With the end of the year approaching, now is the time to consider opening a DAF account to manage your charitable giving and potentially reduce your taxes.

For more information, visit jcfny.org.

This information is not accounting advice. Consult with your accountant regarding your personal situation.