Welcome to the “Ask the Expert” column! Each month, we will feature a different member of our community who is an expert in their craft or field. This month we have a piece on financial giving from Jason McKinney, who is an HMS alumni parent, former staff spouse, and expert in wealth management!


 

Each year when the leaves begin to fall, another season begins:  The giving season. You’ve probably already noticed the two most active times for charities are fall and spring.  Perhaps you’ve been moved by the holiday spirit or simply needed to find a tax write off.

HMS has certainly made giving a little easy with our online payment options and the deft use of Smile.Amazon.com (https://smile.amazon.com.) You can also use another super convenient alternative – Donor Advised Funds.

Often, we’re stuck with the old school method:  Write the check (assuming you have a checkbook), fill out forms, stuff envelopes, wait for the receipt (a letter of thanks), then keep it all in pile until April 14th when you do your taxes.  It may be even more painful if you own a business and cut checks from multiple accounts.  You can stop the madness.

Donor Advised Fund advantages are:

  • -Convenient (click or tap to give)
  • -Single tax form generated no matter how many checks written
  • -You can gift stock and illiquid assets to your own DAF (your giving power can grow with the appreciation of the underlying assets…without ever paying taxes on the gains)
  • -Control over the timing of your gift (think annual events, dinners, auctions, or a monthly giving schedule, etc.)

In practice, you pre-load your DAF with cash, stocks, or other assets, then make a holistic giving plan with the kids over snacks.  The assets you give to your DAF sit until you click on a charity. Come tax time, a single, neat and tidy tax form is generated for the entire year.  Technically you only gave to one charity as far as the IRS is concerned…your DAF. The balance in your account can also carry over into another year. Example:  Gift to your DAF on Christmas Eve 2019 for tax purposes (because you procrastinated again) then when things quiet down after the new year, methodically send checks to your favorite charities.

For those of you who have illiquid assets like business interests, real estate, stocks, etc. your DAF can take them as well.  It’s a savvy maneuver. Your CPA will thank you. For some, the DAF can become a positive focus for the entire family, like tending a garden together.

Giving has entered the modern (convenient) age.  


Get started with these resources:

Add Harbor Montessori School to your DAF!

EIN: 91-1301209

Philanthropy Knowledge Hub – https://www.givingcompass.org/

Charity look up – https://www.guidestar.org

Article about Donor Advised funds – https://www.economist.com/finance-and-economics/2017/03/23/a-philanthropic-boom-donor-advised-funds

 

There many DAF’s in existence.  Some are tailored to your interest, ilk and/or faith.  Here are the big three:

Fidelity – https://www.fidelitycharitable.org/philanthropy/what-is-a-donor-advised-fund.shtml

Schwab – https://www.schwabcharitable.org/public/charitable/donor_advised_funds

Vanguard – https://www.vanguardcharitable.org/

If you have practical questions on using a DAF as a family, a business or as a foundation/trust feel free to reach out (406) 209-9935 (texting is okay).  Please consult your tax advisor for all tax related questions.  


Jason McKinney is a former HMS parent and staff-spouse who also happens to be an independent, fiduciary, accredited wealth management advisor.  Jason’s family uses a DAF they named the Headwaters Giving Fund to give to Harbor Montessori School and other charities.

If you possess expertise in a particular area and would like to share your knowledge with the greater HMS community, please email quinci@harbormontessori.org for a chance to be featured in Ask the Expert!