What is a donor advised fund?

Generally, a donor advised fund is a separately identified fund or account that is maintained and operated by a section 501 (c) (3) organization, which is called a sponsoring organization. Each account is composed of contributions made by individual donors. Once the donor makes the contribution, the organization has legal control over it.

What is a donor-advised fund?

A donor-advised fund (DAF) is an account where you can deposit assets for donation to charity over time. A sponsoring organization manages the account, and the donor recommends how to invest the assets and where to donate them. The donor can also claim a tax deduction for making contributions to the fund. How does a donor-advised fund work?

Should you give to a donor-advised fund?

Giving to a donor-advised fund lets the donor take the tax deduction when it is advantageous. For example, a taxpayer can get a tax deduction for a contribution to a donor-advised fund and decide later which charities are the ultimate beneficiaries. Some donor-advised funds process gifts to foreign charities.