A Donor-Advised Fund (DAF) is a charitable giving vehicle administered by a 501(c)3 public charity created to manage charitable donations on behalf of organizations, families, or individuals. Many times these are called Community Foundations, which serve an entire community with multiple causes versus one charity with one mission.
You can simply donate cash, stocks or other assets to your fund, and you’ll immediately receive your tax deduction. You can donate as much or as little as you wish, and you can add to your fund whenever it’s convenient for you. The money in your fund is invested, so it can grow to make your charitable impact even larger.
You are then able to make grants out of your donor-advised fund to your favorite nonprofit organizations. Typically, there’s no minimum or maximum amount — this means the “when, where and how much” is completely up to you! Most of the time the foundation that holds the donor-advised fund will do the legwork to make sure the organization is a valid 501(c)(3) public charity, and it will mail the check for you.
The reasons people give to a donor-advised fund varies, but it usually always includes one of the following:
- Them wanting to see their donations invested and grow
- It gives them a way to remain more private in their giving by doing so privately and discreetly
- They like that it allows them to impact multiple organizations without having to create their own foundation
There you have it! Now you know all there is to know about donor-advised funds! If you’ve enjoyed today’s Aplos Short, fill out the quick form below to receive weekly updates on all our upcoming Aplos Shorts.