Funds offer charity-giving flexibility

Several brokerage firms are offering donor-advised charitable funds. These are basically mutual fund accounts that hold investments for you until you designate a charity to be paid. It's much like having your own charitable foundation.

A deductible contribution is made to the fund and is held in a charitable account on your behalf until you recommend a charity to recieve donations.

For example, you can place $50,000 in a fund prior to year-end and receive an immediate tax deduction for the current year but the money need not be directed to a specific charity until you see fit to do so years into the future.

Funds held in your charitable account are not included in your estate. Successor advisors can be named to recommend posthumous contributions.

It is possible to donate appreciated securities to these funds as well, allowing a deduction for the full market value of the security and avoiding the taxable gain had the security instead been sold. Often this results in significant tax savings.