What is a donor-advised fund?
A donor-advised fund (DAF) acts like a charitable savings account, allowing you to contribute cash, stocks or other assets into it, and make charitable donations to the organizations you want to support. Essentially, the money or assets that go into a DAF become an irrevocable transfer to a sponsoring public charity with the specific intent of funding charitable gifts.
Here are the major benefits to you for doing your charitable giving in this way:
- You will immediately receive the maximum tax deduction that the IRS allows for the amount you invest in your donor-advised fund.
- At any time afterward, you can make your charitable gifts as grants recommended from your donor-advised fund.
- Your DAF sponsor will handle all record-keeping, disbursements and tax receipts for you.
- The balance remaining in your DAF can be invested for tax-free growth.
- There are no start-up costs for establishing a DAF, and there are no transaction fees. 100% of your recommended grants go to your qualified public charities of choice.
To learn more about establishing a donor-advised fund, you can visit one of these sponsoring public charities: