Understanding Estate Taxes
26. Private charitable foundation
You can also set up your own charitable foundation, donate your assets to it and keep some control over how the money is spent.
To qualify, a small percentage of the foundation's assets must be distributed to charity each year. But you can name whomever you wish to run the foundation-including your grown children-and the foundation can pay them a reasonable salary.
You can be very specific about which charities you want to support or you can leave that up to the trustees of the foundation to decide (within IRS guidelines, of course.)
The tax benefits can be substantial. You save estate taxes because the assets you donate to the foundation are removed from your estate. There will be no capital gains tax when the assets are sold by the foundation, so it's great for appreciated assets. And, you reduce your current income taxes with a charitable income tax deduction.
If you donate publicly traded securities, the charitable income tax deduction will be for the full market value (up to 30% of your adjusted gross income).