Buzzword: Donor-advised funds
Life is hard enough without having to decipher everything. Each week, Marketplace Money brings you a word or a phrase that has bubbled to the top of the news. For instance, donor-advised funds. You hear it, you see it, but do you really know it?
The gift of giving brings us this week's Marketplace Money Buzzword: donor-advised fund.
A donor-advised fund is a way for non-millionaires to set up a charitable trust. Think of it as your own Bill and Melinda Gates Foundation, minus several billion dollars.
Donor-advised funds work like mutual funds. You invest as little as $10,000. The money grows tax-free. Then, at a time you choose, your charity of choice gets the whole shebang.
These funds are registered as non-profit organizations. So when you put your money in, you get a tax deduction.
A nice gift for another worthy charity: Yourself.
