What is a Donor Advised Fund?
A simple, flexible and tax-advantageous way to give to your favorite charities.
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, appreciated assets or investments to a donor-advised fund through your financial advisor, you are eligible to take an immediate tax deduction. Then those funds can be invested for tax-free growth, and you can recommend grants to virtually any IRS-qualified public charity.
You want your charitable donations to be as effective as possible when you give; Donor-advised funds are the fastest-growing charitable giving vehicle in the United States because they are one of the easiest and most tax-advantageous ways to give to charity. Here’s how DAF’s work:
How a donor-advised fund works
1. Contribute 2. Invest 3. Grant
Make a tax-deductible donation through your financial advisor or financial institution
Establish a Giving Account and then donate cash, stocks or non-publicly traded assets such as private business interests, cryptocurrency and private company stock to be eligible for an immediate tax deduction. A contribution to a donor-advised fund is an irrevocable commitment to charity; the funds cannot be returned to the donor or any other individual or used for any purpose other than grantmaking to charities.
Grow your donation, tax-free
While you're deciding which charities to support, your donation can potentially grow, making available even more money for charities. Most sponsoring organizations have a variety of investment options from which you can recommend an investment strategy for your charitable dollars.
Support PWC, the charity you love, now or over time
You can support PWC, an IRS-qualified public charity, with a grant recommendation from you donor-advised fund. A Donor Advised Fund is a great way to support People Working Cooperatively at a pace that is comfortable for you.
With a donor-advised fund, you CANNOT:
Support organizations other than IRS-qualified, 501(c)(3) organizations, such as political groups or crowdfunding campaigns. Private foundations are also ineligible to receive donor-advised fund grants.
Recommend grants that may provide a personal benefit—such as school tuition for a grandchild or tickets to a charity event that you will attend. Because you would receive something of personal value from these grants, they are not eligible, just like they would not be eligible for a tax deduction.