Should you use a donor-advised fund or a charitable trust?

Depending on a donor’s financial situation and philanthropic goals, either a donor-advised fund or charitable trust can be great options. In fact, donor-advised funds can be set up as the charitable beneficiary of a trust to streamline the giving process and provide flexibility in which beneficiaries can receive grants.

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, or DAF, is like a charitable investment account for the sole purpose of supporting charitable organizations you care about. When you contribute cash, securities, or other assets to a donor-advised fund at a public charity, like Fidelity Charitable, you are generally eligible to take an immediate tax deduction.