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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.

Are donor-advised funds still a good choice for charitable giving?

The 2023 DAF Report compiled by the National Philanthropic Trust shows donor-advised funds (DAFs) continue to be a popular choice for charitable giving. Among the highlights of the report: Contributions to DAFs reached $85.53 billion in 2022 – a 9% increase from 2021 and 2018’s contributions.

Should you invest in donor-advised funds?

If that sounds appealing, consider donor-advised funds, or DAFs. These are accounts that allow donors to make contributions to a qualified charity and receive an immediate tax deduction. The funds in a DAF can be invested for tax-free growth. Any investor can open a DAF; they are not limited to investors with ultra-high net worth.

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