Donor Advised Fund
what is a daf?
A Donor Advised Fund (DAF) is a charitable giving account, administered by a public charity that is created to manage charitable donations on behalf of organizations, families, or individuals.
how does a daf work?
GIVE
The Donor contributes assets into a DAF as an irrevocable gift. Gifts can be completed with liquid assets (cash and/or appreciated securities). Some DAF administrators can also accept illiquid assets.
GET
The DAF Administrator is a qualified charity; therefore, the donation is considered a completed gift for tax purposes and the Donor may be eligible to account for the donation as an itemized income tax deduction.
GROW
Assets in the DAF can be invested and grow tax-free, under the ownership of the DAF Administrator, for the purpose of funding future charitable grants. The Donor "recommends" the investment allocation. Some Administrators allow the Donor to hire an Investment Advisor.
GRANT
The Donor requests grants from the DAF to other qualified charitable organizations. The Donor "recommends" amounts, timing, and recipients. Grants can be requested during the Donor's lifetime or during the lifetime of a Successor Donor. Timing can also be requested to occur at the Donor's death.