Prepare today for tomorrow’s taxes, and YOUR future legacy
Did this year’s tax season leave you wondering how you can cut your tax bill next year? If you will have a taxable event—such as a large inheritance or work bonus, appreciated stock or sale of a business—within the next year, consider creating a named endowment fund or donor advised fund through Northfield Shares. Both options offer tax benefits while building a philanthropic legacy that impacts Northfield.
Endowment Funds retain the principal and only the income is spent per the Northfield Shares spending policy. Endowments may be undesignated (leaving the responsibility for grant distributions to the Northfield Shares Grants Committee); field of interest (donor designates the general area in which grants should be made, such as community beautification); or designated (donor selects the charities that will receive the annual grant distributions and the relative allocation percentages). As the principal is never spent, your generous support continues in perpetuity.
Donor Advised Funds (DAFs) are like having your own family foundation, but without all of the legal and accounting paperwork. You can receive an immediate tax benefit when establishing the fund, but delay any decisions regarding what charities will benefit. Your family can recommend grants to your favorite causes on a schedule that works for you. By researching different nonprofits and determining which to support, kids learn the importance of thoughtful philanthropy and how to most effectively use their grant dollars.
Whether your philanthropic legacy is short-term through a donor advised fund or in perpetuity through an endowment fund, a named fund through Northfield Shares can create tax benefits that may help you breathe easier next year at tax time. To learn more, contact Mike Krance at mikekrance@northfieldshares.org.
