Donor Advised Fund

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Donor Advised Fund

What is a donor advised fund?

A donor advised fund (DAF) provides donors with a centralized charitable giving vehicle. It allows inclined individuals, families, and corporations to make a charitable gift to a public charity that sponsors a DAF program and take an immediate tax deduction. Most sponsoring organizations of DAFs accept cash equivalents, securities, and certain other assets.

How does it work?

Establish your Donor Advised Fund by making an irrevocable, tax-deductible donation to a public charity that sponsors a DAF program. Advise the investment allocation of the donated assets (any investent growth is tax-free). Recommend grants to qualified public charities of your choice.

Main Advantages of a Donor Advised Fund

  • Simplicity– The DAF sponsr handles all record-keeping, disbursements, and tax receipts.
  • Flexibility– Timing of your tax deduction can be separate from your charitable decision making
  • Tax-effeciency– Contributions are tax-deductible and any investment growth in the DAF is tax-free. It is also easy to donate long term appreciated securities, elminating capital gains taxes and allowing you to support multiple charities from one block of stock.
  • Family legacy– A DAF is a powerful way to build or continue a tradition of family philanthropy.
  • No start-up costs– There is no cost to establish a donor advised fun. However, there are often minimum inital charitable contributions to establish the DAF (typically $5,000 or more).
  • No transaction fees – 100% of your recommended grant goes to your qualified public charity of choice.
  • Privacy if desired– Donors may choose to remain anonymous to the grant recipient.