Contributing to a Vanguard Charitable account
Contributing to a Vanguard Charitable account unlocks a series of tax benefits:
- Immediate tax deduction for each contribution
- Tax-free growth of invested assets
- Avoidance of capital gains taxes on appreciated assets
- No estate taxes on contributed assets
- A single charity receipt to manage tax deductions
Only contributions are eligible for a tax deduction. Grants or transfers from another donor-advised fund or private foundation into an account at Vanguard Charitable do not trigger an additional deduction.
Donors receive an immediate tax deduction on their contributions, but they don’t need to grant right away. One of the benefits of a DAF is that donors can wait until they develop a plan for strategic granting. For instance, many donors grant small gifts regularly and save to make a larger, more impactful gift in the future.
Minimum contribution amount
The minimum to open a new account is $25,000 with a minimum contribution after that of $5,000.
Vanguard Charitable’s minimums are intended to support high impact philanthropy. We feel these amounts enable donors to be more strategic with their giving because there’s enough to invest and grow for future grants while still fulfilling current granting needs. At the same time, those minimums allow us to keep processing expenses as low as possible, creating savings that we pass along to donors and that in turn enable them to ultimately grant more to charity.Due to the complexity of processing certain types of assets, minimum contributions for these assets may be higher:
Vanguard Charitable can process gifts that many charities are not equipped to accept, such as appreciated securities, real estate, or private equity. In addition to cash, checks, wires, and debit or credit cards, donors can contribute a wide variety of noncash and illiquid assets:
- Stocks and bonds
- Mutual funds and ETFs
- Property (real estate, cars, artwork, collectibles)
- Retirement accounts
- Life insurance
- Business interests
- Hedge fund holdings
- Private equity
- Pre-IPO shares
- Restricted stock
For an overview of considerations and tax advantages for each asset type, review our Types of charitable assets chart.
Contributions of complex, or special, assets (restricted stock, hedge fund holdings, private equity investments, insurance policies, etc.) often involve lengthier processing timeframes. Please contact us at 888-383-4483 to discuss.
Documentation for each contribution is available online. Vanguard Charitable will also send:
- A tax acknowledgement (substantiation) letter to donors for tax-reporting purposes. This means you or your client don’t have to track down tax receipts from multiple charities.
- A contribution confirmation letter to account advisors and interested parties confirming the transaction and showing a summary of account investments and the investment allocation of the net gift proceeds.
Valuations and tax treatments
Contributed assets have different income and estate tax treatments. See our Types of charitable assets chart for information on valuation and tax benefits.
Donors are responsible for determining the valuation date and corresponding fair market value of each charitable contribution.
Charitable deductions are subject to tax limitations based on an individual’s adjusted gross income (AGI). If you are not a tax advisor, we recommend that you work with one to create your client’s charitable strategy.