DONOR-ADVISED FUNDS
A Donor-Advised Fund (commonly called a DAF) is a charitable giving vehicle administered by a public charity created to manage charitable donations on behalf of organizations, families, or individuals. To participate in a donor-advised fund, a donating individual or organization opens an account in the fund and deposits cash, securities, or other financial instruments. The account is managed by an investment professional who seeks to grow the assets. Returns on the investment can further enhance the value of the gift to charity. The donor receives an income tax charitable deduction for the current year.
The donor surrenders ownership of anything they put in the fund. However, but retain advisory privileges over how their account is invested, and how it distributes money to charities. The DAF makes grants to charities based on the donor’s recommendations. All grants must be approved by the sponsoring organization of the DAF. Grants can be made at any time, and there are no annual distribution requirements, as there are with private foundations.
In addition, granting can be done anonymously to protect the donor’s privacy, a benefit not fully afforded in other giving vehicles. DAFs may be established with community foundations, certain financial services providers, or other charitable organizations that sponsor them.
This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.
The donor surrenders ownership of anything they put in the fund. However, but retain advisory privileges over how their account is invested, and how it distributes money to charities. The DAF makes grants to charities based on the donor’s recommendations. All grants must be approved by the sponsoring organization of the DAF. Grants can be made at any time, and there are no annual distribution requirements, as there are with private foundations.
In addition, granting can be done anonymously to protect the donor’s privacy, a benefit not fully afforded in other giving vehicles. DAFs may be established with community foundations, certain financial services providers, or other charitable organizations that sponsor them.
This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.