August 14, 2013   Giving

Our Guide to Keeping Your Charitable Giving Private


There are many reasons why a person who chooses to participate in charitable giving might wish to do so privately. The most commonly cited reason for private giving is to avoid the mass of solicitations that follow after a single charitable gift.
 
One way to maintain your privacy is to use an advisor as an intermediary between you and the charity. Have your advisor meet with the charity and offer the funds on the provision that your identity remains anonymous. The advisor may deliver the funds, then return to you with a receipt for tax purposes. You may use anyone as an intermediary, such as an attorney, financial professional, bank, or personal advisor.
 
If you do a lot of charitable giving, you may want to consider creating an entity for this purpose. Through an entity, you can remain anonymous as an individual because your check is written from the entity, rather than yourself. If you set up a grantor trust to serve as your entity, any tax deductions resulting from your gifts will still flow through to your personal taxes. Aside from the grantor trust, another popular entity option is the limited liability company.
 
A third solution is to set up a donor-advised fund. These funds are typically set up through churches, community foundations, universities, or commercial gift funds. Through a donor-advised fund, which is a public charity, people can create grants that are then distributed to not-for-profit organizations. The individuals remain private because their gift is given as a grant from the charity. The caveat to this option is that, because it is a public charity, individuals who donate money are not able to exercise absolute control over how it is used.
 
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