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Family Office, Accountants, Lawyers

At Keshet, we strongly believe that getting to know the Donor-Advised Fund (DAF) model, along with all the related information that appears below, will help you when it comes time to advise your clients about their tax-deductible donations, as you together discuss the solution that will provide them the best tax benefits while enabling them to achieve their desired impact on society.

How does the financial model work?

The DAF model is an innovative financial tool for managing tax-deductible donations in accordance with the regulations set by the State of Israel. The model is active in the US, Canada, England, Australia and more.

Using the model, one can transfer a donation to Keshet and immediately receive a receipt for tax credit, as Keshet is a public benefit company with a permit under section 46 of the Israeli Tax Authority. Then, in the years to come, one can decide when and to which organizations, of those that have been thoroughly checked and approved by Keshet, one wishes to donate.  

Keshet accepts a wide variety of assets as donations: Appreciated stocks, cash, real estate and even art objects. 

Funds can be invested at an investment house, where they accumulate in value and earn tax-exempt dividends, enabling the donor later on to generate an even greater impact.

For additional information, contact us info@keshet-il.org

Read here about legislation on donations in Israel

Donating Appreciated Stocks

Keshet receives a variety of assets for donation – including appreciated stocks, which are exempt from capital gains tax.

Upon transfer of their shares to Keshet, donors will receive a receipt for their donation under section 46. The value of the stocks will be determined upon the closing of the trading day. 

The process of donating stocks takes several days. 

Guidance of the Israel Tax Authority
For more information contact us

*The information on this site should not be construed as tax or legal advice. Keshet recommends that donors consult with qualified tax advisors and lawyers who have expertise in the country from which the assets will be donated.

Advantages of the DAF model

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Tax Benefit Optimization

A separation between the donation to Keshet and its transfer to an organization at a later date, while receiving the maximum tax credit.

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Simplicity

Keshet’s platform provides information in a way that is easy to manage and to understand.

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Trust

Keshet thoroughly vet and approve every organization according to Israeli regulations.

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Continuity

The fund can be passed on to future generations, creating a family heritage of philanthropy.

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Multiple Options to Donate Assets

Appreciated stocks, cash, real estate and even art objects.

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Flexibility

It enables donors to contribute when they feel the timing is right.

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Involvement

Donors can transfer the funds through Keshet and stay highly involved with the designated organization.

Frequently Asked Questions

Keshet Donor-Advised Fund

Shfayim Center (2nd floor)
P.O.B 376
Shfayim 6099000
Phone: +972-9-9533895

info@keshet-il.org

Ecosystem Partners

The information on this site should not be construed as tax or legal advice. Keshet recommends that donors consult with qualified tax advisors and lawyers who have expertise in the country from which the assets will be donated.

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 Design by David Haliva

Cash donations

Section 46 of the Income Tax Ordinance: tax credits for donations to an association / public benefit company )PBC(

Qualified donations made to public institutions are subject to minimum and maximum amounts. According to the Income Tax Ordinance (the “Ordinance”), out of an aim to encourage donations to public institutions, tax credits may be received for donations to institutions that have received recognition under Section 46 of the Ordinance.

Credits are given only against an original receipt explicitly stating the name of the donor.

Credits are given as follows:

Individuals – a 35% credit

Companies – a tax credit at the corporate tax rate

Amendment 194 to the Ordinance prescribes that from January 1, 2012, the minimum donation amount for purposes of receipt of a credit as aforesaid is ILS 180, and the maximum amount in respect of which a credit will be given will not exceed ILS 9,350,000, or 30% of the total taxable income of the taxpayer in such tax year, whichever is lower.

Donations of shares

Section 97 of the Income Tax Ordinance: exemption from tax on gifts

The gifting of an asset is a sale event which is liable for tax on the capital gain. Calculation of the capital gain due to the giving of the gift is made in accordance with Section 91 of the Income Tax Ordinance (identical to a ‘regular’ sale).

However, the legislator permitted the giving of gifts without the giver of the gift being taxed on the capital gain. The exemption is given in Section 97 as follows:

“97. (a) A capital gain will be exempt from tax if it derives from one of the following:

(4) A gift to the State, a local authority, the Jewish National Fund, Keren Hayesod – United Israel Appeal, or a public institution within the meaning thereof in Section 9(2)**

(5) A gift to a relative and a gift to another individual if the assessing officer is convinced that the gift was given in good faith; (Amendment 132 added the following), provided that the gift recipient is not a foreign resident;”

Over and above proof that it is a gift (see “what is a gift”), in order to receive an exemption, the taxpayer must meet additional conditions:

97(a)(4) conditions the granting of the exemption on the gift being given to a closed list of bodies.

** Section 9(2) of the Income Tax Ordinance prescribes that a body that is defined as a “public institution” is exempt from the payment of tax on its non-business income (except with respect to income from a dividend, interest or linkage differentials). An association registered at Income Tax is automatically defined as a “public institution” and receives a tax exemption under Section 9(2). In other words, an association in fact does not need to submit any application in order to obtain the certificate, and does not need to hold any document attesting that the certificate was granted thereto.

Additional information may be found on the IL Tax Authority website

The information on this site should not be construed as tax or legal advice. Keshet recommends that donors consult with qualified tax advisors and lawyers who have expertise in the country from which the assets will be donated.

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