What is a DAF?

Explore how donor-advised funds empower your charitable giving and maximize your impact with flexible solutions. 

A DAF is a small account within a larger foundation.

Donor-Advised Fund (DAF)

A Donor-Advised Fund or a DAF is a charitable account administered by a private third-party foundation
(DAF sponsors), created to manage charitable donations.

What can you do with a DAF?

  • Recommend grants from your account to qualified charities

  • Receive charitable tax benefit for your donations*

  • Contribute cash and non-cash assets to your account

  • Invest your contributions

  • Name your DAF account and choose your advisors and successors

How does it work?

Cash and other assets are funded into a DAF as contributions

Contributions are put and held in an account under the donor’s name

Donors receive a tax deduction for contributions made to the Fund

The DAF sponsor holds the contributions and distributes them to the donor’s charity of choice whenever they want to

The donor recommends using their DAF assets to provide grants to qualified charitable organizations and initiatives worldwide

Common Features & Benefits

Helps donors maximize
tax benefits

Charitable assets may grow over time

DAF sponsors handle all due diligence and regulatory compliance

DAFs can accept a wide range of assets such as cash, stock, cryptocurrency, and real estate for contributions

Donors can recommend grants and contribute immediately

DAFs provide streamlined grantmaking

DAFs offer privacy and anonymity when sending grants

Donors can support international charities and organizations and still be eligible to claim a tax deduction

Guides & Guardrails

  • Contributions made to DAFs are not withdrawable. Once funds enter a DAF, it can only be sent out to charities as grants.

  • Funds placed inside a DAF can only be used for charitable purposes.

  • DAF sponsors usually have a minimum required contribution to open an account.

  • DAFs can only send out grants to qualified charities, churches or field workers

  • DAF sponsors share the costs of running the organization amongst the people and organizations that use it through assessments on balances and activity

  • By law, a payout requirement is not mandatory for DAFs but DAF sponsors may apply minimum account activity guidelines.

Differences between
DAFs & Private Foundations

Start-up Time

Immediate

Can take several weeks or months

Start-up Cost

None

Fees, including legal, are to be expected

Required Grant Distribution

None

Generally required to distribute a percentage of assets annually (U.S. standard)

Privacy

Names of individual donors are not disclosed to the public, and grants can be made anonymously

Lower privacy; financials and donor information are often publicly accessible.

Administrative
Responsibilities

Recommend grants to charitable causes of their choosing

Manage assets, keep records, select charities, administer grants, file government reports, audits, maintain board minutes, etc.

Structure Style

Shared Structure

Independent Structure

DAFs
Shared Structure

Shared resources and requirements lead to lower costs and streamlined operations, allowing donors to focus more on the causes they care about

DAF Sponsor
Managing administration, finance, legal, tech, etc.

Private Foundation 1

Private Foundation 2

Private Foundation 3

Private Foundations
Shared Structure

Each foundation needs various resources and requirements to operate, which can often be costly and time-consuming

Private Foundation 1

Managing administration, finance, legal, tech, etc.

Private Foundation 2

Managing administration, finance, legal, tech, etc.

Private Foundation 3

Managing administration, finance, legal, tech, etc.