Donor advised funds have become increasingly popular, primarily because they offer the donor ease of administration, while still allowing him or her to maintain significant control over the placement and distribution of charitable gifts. Companies are able to offer this service to clients with fewer transaction costs than if the funds were handled privately.



Donor-Advised funds democratize philanthropy by aggregating multiple donors and processing high numbers of charitable transactions, thereby lowering the cost barriers to entry and making it possible for individuals with as little as $5,000 to participate in the giving process. Furthermore, Donor-Advised funds offer abundant tax advantages. Unlike private foundations, DAF holders enjoy a federal income tax deduction up to 50% of adjusted gross income for cash contributions, and up to 30% of adjusted gross income for the appreciated securities they donate. And by transferring assets such as limited partnership interests to DAFs, donors avoid capital gains taxes and receive immediate fair-market-value tax deductions.


There are several different types of Donor-Advised fund sponsors to choose from. Some of the different models include:




•          National DAF Organizations: Most of the approximately 30 national DAF organizations in existence are actually charitable arms of for-profit financial services institutions, such as the Vanguard Charitable Endowment Program, the Schwab Charitable Fund and the Fidelity Charitable Gift Fund. Other national DAF sponsors are non-affiliated with financial entities, including the American Endowment Foundation and the National Philanthropic Trust.https://www.investopedia.com/terms/d/donoradvisedfund.asp