Donor-Advised Fund

A Donor-Advised Fund (DAF) is very similar to a health savings account. Money is deposited into an account that can grow in value but instead of using the dollars to pay for health expenses, funds deposited into a DAF are granted out to charities. Donors make gifts directly to a sponsoring charity that maintains their DAF account, receive an immediate charitable deduction for their donations and then recommend the charities they want to receive grants.

In technical terms, each DAF is a segregated fund maintained by a qualified public charity which is created when a donor makes a gift of cash or assets. This gift allows the donor to receive an immediate income tax deduction, avoid the capital gains tax on appreciated assets and have the ability to make grant recommendations to charities at any time. The ability to make grant recommendations will continue for the life of the donor and then future generations can be appointed to make the recommendations for the rest of their lives.

Who does it work for?

Anyone who is subject to paying capital gains taxes on appreciated assets, whose estate is subject to taxes, who wants to benefit charity, and who wants to involve their family in philanthropy.

How does it work?

After a DAF is funded, donors use our website to recommend grants to their favorite charities. After specifying the charity, the amount and any special instructions for the grant (like remaining anonymous or giving in the gift in memory of someone), our team springs into action. Internally, we vet the charity to verify it is an IRS recognized 501(c)(3) charity eligible to receive grants from a DAF, and if all is well, we write the check and mail it to the donor’s charity.
Donors can choose to make grants immediately from their account or delay their giving. Also, donors have the ability to set-up recurring grants, a favorite feature of those who use their donor-advised fund to tithe.

Benefits of a DAF

Reduced Tax Costs Using a DAF to avoid capital gains taxes and receive an immediate income strategy can assist donors in achieving various tax reduction goals.

Investment Flexibility A donor can recommend their financial advisor to manage the assets of their DAF account in a wide range of investment options.

Charitable Impact and Legacy DAFs are a wonderful tool for use in establishing a legacy of giving. Heirs and loved ones can be part of the process of distributing grants to charity, and can even be named successor grant advisors to allow the DAF to last beyond a single lifetime and for generations to come.

Helpful Downloads

Quick Guide

Reference Guide for Donor-Advised Funds

Donor Story

Jack & Dee Twain avoid capital gains and endow charitable giving

Gift Summary

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Circular and Application

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