Donor-Advised Funds

A Donor-Advised Fund (DAF) is a charitable giving vehicle administered by a 501(c)(3) public charity created to manage charitable donations on behalf of organizations, families, or individuals. Also known as Community Foundations, they serve an entire community with multiple causes versus one charity with one mission.

You can simply donate cash, stocks or other assets to your fund, and you’ll immediately receive your tax deduction. You can donate as much or as little as you wish, and you can add to your fund whenever it’s convenient for you. What you add to a donor-advised fund is invested, so it can grow to make your charitable impact even larger.

You are then able to give to your favorite nonprofit or church out of your donor-advised fund. Typically, there’s no minimum or maximum amount. This means the when, where, and how much are completely up to you. Most of the time the foundation that holds the donor-advised fund will do the legwork to make sure the organization is a valid 501(c)(3) public charity, and it will mail the check for you.

Reasons to Give to a DAF

The reasons people give to a donor-advised fund vary, but usually they include one of the following:

• People like seeing their donations invested and grow
• People can give discreetly to a DAF and therefore remain more private
• A DAF allows people to impact multiple organizations without having to create their own foundation