Donor Advised Fund

One of the easiest structures for larger donations ($5,000 or more) is setting up a personal Donor Advised Fund. It is a low cost, low-maintenance alternative to a private foundation.

• Donations to a Donor Advised Fund (DAF) are usually fully tax deductible in the tax year they are made.
• These contributions are placed in an account that has the potential to grow tax-free and fund more charitable giving.
• Investment of the account can leverage philanthropic goals if invested in socially responsible and community development options (e.g. building affordable housing, daycare centers, etc.).
• Some DAFs offer access to information and analysis of charities to help inform (but not dictate) your giving.
• You can recommend that grants be made from the account to charitable organizations of your choosing, on your timetable throughout the months and years.

These are pooled, tax-free investment funds managed by financial institutions. The funds make grants to charitable recipients based upon donor recommendation. Donors receive reports on the growth of the account and grants made. Some funds allow multiple donors to pool their individual contributions to meet minimum investment requirements and the initial contributions may be in the form of cash or appreciated stock. If you donate stock you can take advantage of some added tax benefits.

A DAF offers many of the advantages of a private foundation without the expensive set-up fees and costly, time-intensive administration. While a private foundation offers greater control over investment options and choice of grant recipients, a DAF is a hassle-free and cost-effective alternative.

Disclaimer Regarding Tax Matters: Information that we provide on our site is not intended to be tax, legal or accounting advice, and you should not rely upon it as such. We make no claims regarding the tax consequences of your use of the Services or any donations you make to charitable organizations listed in the Justgive Guide. You should consult a qualified tax advisor, attorney or accountant regarding the applicability of prevailing tax laws and regulations to your use of the services and donations to charitable organizations.