FAQ

• What is a Donor Advised Fund (DAF)?

  A DAF works like an investment account with the sole purpose of those funds going towards charity. You donate cash, stocks, or other assets to a DAF sponsor (like Fidelity Charitable, Schwab Charitable, Vanguard, etc.) and get an immediate tax deduction for the full value of the contribution. The donation goes into the donor advised fund account, where it is invested and grows tax-free. You recommend grants from that account to your favorite nonprofits and the sponsoring organization donates in your name (or anonymously, if you prefer) and handles all the administrative work.

• Why do donors use DAFs instead of giving directly to nonprofits?

  DAFs offer several unique advantages that allow donors more strategic control as well as a financially savvy approach to their philanthropy. The DAF structure allows for more intentional timing of when funds are put into the DAF account and when the tax-deduction is taken. Also, there is added simplicity because the sponsoring organization of the DAF manages the fund and the distribution to charities. 

• Who is the sponsoring organization managing my DAF?

  DAFs are held by 501(c)(3) public charities known as "sponsoring organizations." These might include: national sponsors (e.g., Fidelity Charitable, Vanguard Charitable), community foundations, or others. They are responsible for managing your fund, handling compliance, and distributing grants per your recommendations. Because you are contributing funds that will be directed to nonprofit organizations, the sponsoring organization is able to provide you with an immediate tax-deduction for your charitable contribution. Each organization will have its own policies regarding minimum investments, contribution amounts, and distribution timing.

• What happens to my DAF while I decide where to give?

  One of the key benefits of a DAF is that your donation can be invested in a variety of portfolios offered by the sponsor. Any growth is tax-free and can ultimately increase the amount you’re able to give.

• Can I use my DAF to give to any nonprofit I choose?

  You can recommend grants to any IRS-qualified 501(c)(3) public charity. You can even support state or local government organizations, like public colleges or libraries. There are some restrictions that apply so check with the sponsoring organization on distribution policies (e.g., DAF funds are not eligible to buy event tickets or fulfill a personal pledge).