A donor-advised fund (DAF) is a charitable giving account managed by a nonprofit organization known as a “sponsor.” It allows you to support the charitable causes that matter most to you while offering flexibility in how and when your donations are distributed. Contributions to a DAF generally qualify for an immediate charitable tax deduction, and you can recommend grants to your preferred qualified charities over time. As the individual who recommends to the sponsor where to direct grants from the fund, you are referred to as the “advisor.”
Each sponsor has its own rules and requirements for its DAF program — e.g., minimum fund size, grant size, investment options, fees, etc. Please review these rules and requirements carefully before setting up your DAF. Also, you may not use DAF grants for charitable giving if you receive something of value in return — for example, you cannot use DAF grants to reserve a burial space at a parish columbarium or cemetery. Other considerations apply to DAFs; please discuss with your financial advisor and DAF sponsor.
Donor Benefits
- Receive an immediate income tax deduction for the assets you use to establish your DAF
- Simplify your charitable giving and reduce tax paperwork/receipts
- Maintain the freedom to choose which charities your DAF supports and when the DAF grants are made
- Potentially leverage a DAF to contribute more complex assets that you may not be able to give to charities directly (e.g., gifts of cryptocurrency or privately/closely-held securities)
To learn more about making a gift from a donor advised fund and other planned giving options that may be available to you, please reach out to Erika Boden, Director of Planned Giving, erika@foundationdor.org, 919-568-1065.