A donor-advised fund is an investment account that makes charitable giving easy.
How it works
You deposit money into an account and then use those funds to support your favorite charities.
When you want to grant money from the fund to a charitable organization, such as APHA, you make a request to the DAF sponsor to issue a grant.
Why choose a donor-advised fund
Tax Benefits:
- DAFs are regarded as fully qualified charities under IRS regulations.
- You get a tax deduction for donations to the DAF in the year you make them.
- The assets in a DAF are invested and can appreciate tax-free until you’re ready to donate them to your charity of choice.
Streamlined Giving:
- DAFs are quick to set up and easy to manage online.
- Statements of your charitable activities are consolidated in a single place.
- You have the flexibility to give any amount, any time, to nearly any charity across the country, and many around the world.
- You can use DAFs to make non-cash charitable donations, including contributions of real estate, privately held business interests and cryptocurrency.
Other considerations
When you request that a grant be made to a charitable organization, you are “advising” or recommending that the grant go to that charity.
In return for giving up control of the money you deposit into a DAF, you receive tax deductions. In our experience, when a donor has requested that a DAF grant be made to APHA, it has been approved.
Get started
As with all decisions on taxable activities and financial planning, consult with your financial advisor if a DAF makes sense for your charitable giving goals.
Read all documentation before setting up a DAF, such as the terms and conditions for opening an account, minimum account balances, possible restrictions on approved charities, beneficiary designations and prescribed investment opportunities.
DAF administrators:
Many local community foundations also offer DAFs.