Donor-Advised Funds

Donor-Advised Funds are the fastest growing charitable vehicle in the United States, because they are one of the easiest and most tax advantageous ways to give to the charities you care about. A Donor-Advised Fund (DAF) is an investment account dedicated to your philanthropic causes, or a fund that serves as your own personal foundation. DAFs are managed by sponsoring organizations, which are themselves tax-exempt organizations. DAFs provide donors with long-term, strategic options for planning their philanthropy.

Here’s how a DAF works:

• A donor makes an irrevocable gift to a DAF and takes an immediate tax deduction. The charitable assets now legally belong to that DAF’s sponsoring organization. The donor (you), and other named individuals, become DAF advisors.

• The DAF advisors (you) recommend how the assets are invested, and the assets continue to grow tax-free. You can donate ash, stocks, or non-publicly traded assets.

• The DAF Advisors (you) also recommend grants to the non-profits they wish to support.

• The sponsoring organization confirms that these non-profits are eligible, then issue grants to the recommended charities.

All DAFs require a minimum balance to open the account, which can be as low as $5,000. Specific policies vary by sponsoring organizations---most donors weigh their options before deciding whether they want to enter a community foundation, a single-issue organization, or a national organization, such as Vanguard Charitable to sponsor their investments.