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.

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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.

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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:

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How a donor-advised fund works

1. Contribute          2. Invest          3. Grant

 

Make a tax-deductible donation through your financial advisor or financial institution

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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.

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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.

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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.