Charitable Giving & Philanthropy

Charitable Giving Advisor

Wealth affects all aspects of your life. Let BWFA help you manage and navigate the tax benefits of your charitable giving efforts in the Baltimore and Washington, D.C. metro areas and across the country.

We’ll give you tax advice on how to best handle your charitable giving. As a philanthropy advisor, we can help you decide which charities to give to, as well as how donating can benefit your business.

Donor-Advised Funds

Donor-Advised Funds (DAFs) are funds held within, and managed by, a public charity. Community foundations, such as the Community Foundation of Howard County, helped grow the DAF effort as a way to better manage individuals’ charitable giving desires. Holders can pass off the administration of the fund to the foundation, making a DAF an easy way to receive tax benefits with minimal burden.

Establishing a Donor-Advised Fund allows you to make a gift to the a foundation of your choice, then remain involved in suggesting uses for your gift. You can suggest ongoing uses for the fund – targeting the issues you and your family care about most. Grant awards are issued to the charities in the name of the fund (or anonymously if you prefer). It’s a simple, powerful, and highly personal approach to giving – and a great way to involve your entire family in a meaningful donation.

Tax Benefits

DAFs have grown more popular in recent years. They make it easy to manage and keep track of your charitable giving throughout the year. DAFs are tax-deductible. On federal taxes, holders can deduct up to a 50% of adjusted gross income for cash contributions, and up to 30% of adjusted gross income for appreciated securities.

For more detailed information on how the IRS regards DAFs, click here.

DAFs are not required to meet a legal minimum payout annually like private foundations. They are not subject to reporting or minimum-disbursement requirements, therefore assets can stay in funds indefinitely.

DAFs and Your Investments at BWFA

As a BWFA client, you will have the ability to transfer assets you hold through BWFA to a DAF for charitable purposes. Upon the transfer you will receive an immediate tax deduction for the market value of the securities, and the stock position liquidates, thereby eliminating a capital gains tax, which is one of the reasons it’s so beneficial to house your tax services, financial planning, and retirement planning all in one place.

Rather than using cash from a checking account to donate to charity, you can use the value of an asset to donate. You are able to keep the money in your checking account and potentially use it to purchase more shares of a valuable security.

Charitable Remainder Trust

BWFA is a qualified will & trusts advisor. A Charitable Remainder Trust (CRT) is an irrevocable, tax-exempt trust with two parts: 1) the income interest, and 2) the remainder interest. The income interest is the income paid to the individuals who established the trust (or their designated beneficiaries) for their lifetime or a term of years. The remainder interest is the money remaining in the CRT when the trust terminates. The remainder interest is given to the qualified organizations (including family foundations and donor- advised funds) of the donor’s choice as specified in the trust document.

Clients donate money for a variety of reasons. A charitable trust may be a perfect fit, since it can be an effective way for clients to achieve one or several goals: give money to charity, provide a limited monetary benefit to themselves or their heirs, and receive potentially substantial savings in income, estate or gift taxes.

Benefits of a CRT

Like a DAF, there are several tax benefits to a CRT. Through a CRT, appreciated assets may be sold free from the erosion of capital gains tax. Additionally, a gift to a CRT can provide you with a current income tax deduction that can offset all forms of income.

Amounts transferred to a CRT are not generally subject to gift or estate taxes. The combination of capital gains tax, gift tax and estate tax avoidance can be very compelling for those who wish to control their social capital.

BWFA’s Portfolio Management team is an appropriate resource for those holding a CRT. The CRT not only provides the means to dispose of management intensive assets, it also supplies a mechanism to provide professional asset management during a person’s later years when it may be most needed or desired.

Private Foundations

A Private Foundation is a nonprofit organization with a principal fund managed by its own directors or trustees. They are often called “family foundations” and one or more members will serve as the board member, as well as the donor. Private foundations maintain or aid charitable, educational, religious, or other activities serving the public good, primarily through the making of grants to other nonprofit organizations. Private foundations are tax-exempt, as long as they qualify under Section 501(c)(3) of US tax code.

The donors determine the purpose of the foundation. Private foundations maintain or aid charitable, educational, religious, or other activities serving the public good, primarily through the making of grants to other nonprofit organizations.


To speak to a financial advisor or for more information on establishing a charitable giving account, contact Rob Carpenter at 410-461-3900, or emailus@bwfa.com.