Donor-Advised Funds Frequently Asked Questions
A Donor-Advised Fund (DAF) is an investment account designed for charitable giving, widely regarded as the fastest-growing charitable giving vehicle in the United States. DAFs offer donors the opportunity to create and maintain a fund at relatively low costs while providing some control over their tax situation through strategic giving.
Comprising contributions from individuals, a DAF is administered by a third-party entity known as the sponsoring organization. It provides immediate tax relief to donors and enables support for preferred charitable causes either immediately or over time.
A donor initiates a DAF by making an irrevocable gift to the fund, for which they receive a tax deduction in the year of the contribution. Upon receipt, the sponsoring organization assumes legal control over the funds, allowing the donor to make grant recommendations to eligible charitable organizations of their choice.
The Internal Revenue Service (IRS) stipulates guidelines concerning the eligibility of organizations to receive grants from DAFs, as well as the permissible purposes of such grants. For instance, grants must be directed to qualified charities and cannot benefit individuals directly, nor can they result in more than an incidental benefit to the donor. Goodwill of the Great Plains is considered a qualified charity under the IRS guidelines.
Donor-Advised Fund, the donor receives tax documentation from the sponsoring organization, whereas in a direct donation, tax documentation is provided by the recipient charity.
• Simple to establish
• Flexible funding options
• Easily accessible
• Tax advantages
• Typically requires no minimum distribution
• Anonymous granting
• Investment options
Yes, donors to Donor-Advised Funds receive tax documentation from the sponsoring organization.
For further inquiries, please contact Briget Solomon at solomonb@goodwillgreatplains.org, and our team will be delighted to assist you.
Thank you for recognizing the significance of our work and the indispensable role philanthropy plays in enabling it.
If you've already made a DAF gift, we encourage you to share it with us! Your support is invaluable and we would like to thank you.