Donor-Advised Funds

Part of TFE’s mission is to keep you informed about topics that impact the financial health of parishes and ministries of the Diocese of Milwaukee. Donor-advised funds are one tool people can use to positively impact a parish or outreach ministry they hold dear.

What Is a Donor-Advised Fund?

A donor-advised fund is an investment account whose purpose is to financially support a charitable organization. The funds invested can grow, like any other investment, and the donor can then recommend grants from the fund to the charitable organization.

Benefits of a Donor-Advised Fund

Donor-advised funds have a number of benefits for donors. First, these funds allow donors to support organizations they feel strongly about in the present and in the future; grants can be disbursed from the fund during the donor’s life and the donor also chooses where the remaining funds will be given at their death.

Donors take the tax deduction for the charitable contribution when they donate to the fund, not when money is given to the charitable organization. This means that donors can time their charitable giving to be most advantageous for tax purposes. Here’s how that works.

  • First, a donor establishes the donor-advised fund and contributes to it. The donor can take a tax deduction for contributions to the fund, because the money, once donated, must be eventually given to a charitable organization.
  • Next, the donor’s invested money can grow.
  • Then, the donor can direct money from the fund to be given to the charity of their choice.

Other Tax Considerations

The Tax Cuts and Jobs Act of 2017 raised the standard deduction for taxpayers. As a result, it now takes more itemized deductions to exceed the standard deduction in a given tax year. This means in order to realize the most tax benefit from charitable contributions, taxpayers may want to choose to time their charitable giving so that it occurs in a tax year where they are itemizing. A donor-advised fund can help by giving taxpayers a place to make their contribution even before they have determined exactly where it will go.

Donor-Advised Funds and TFE

TFE can help donors who have charitable giving goals consistent with TFE’s mission to support Episcopal parishes and outreach ministries. Grants from donor-advised funds established with TFE would be restricted to Episcopal entities, or entities closely affiliated with the Episcopal Diocese of Milwaukee. This includes

  • parishes,
  • the Haiti Project, the Hospitality Center, St. Francis House, The Gathering, and other Episcopal organizations affiliated with the Episcopal Diocese of Milwaukee,
  • diocesan outreach initiatives, such as the recent appeal to help the Diocese of Nawala,
  • Episcopal entities outside of the diocese, such as churches attended by “snowbirds” during the Wisconsin winter,
  • seminaries or outreach initiatives of the National Episcopal Church.

Have Questions?

Are you interested in establishing a donor-advised fund to benefit your parish or other Episcopal ministry? Contact TFE’s Executive Director, Jill Heller, who can be reached at (262) 902–5901 or by email at director@tfemil.org.

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