A donor advised fund (DAF) is a charitable account administered by a sponsoring nonprofit organization, or “sponsor,” for the purpose of funding future gifts to charity. When a donor contributes to a DAF, he/she receives an immediate tax deduction and the flexibility to recommend grants to charitable organizations over time. The person who can recommend how the sponsor distributes grants is referred to as the “advisor.”
How it works
Give
A donor opens a DAF with a sponsoring organization, such as Fidelity Charitable, National Philanthropic Trust, Schwab Charitable, or Vanguard Charitable, and contributes to it. Many donors simply contribute cash, but sponsoring organizations are usually able to accept gifts of appreciated stock or other assets, as well. Some sponsoring organizations are even able to accept cryptocurrency. The donor receives a tax deduction in the year the contribution is made to the DAF.
Each sponsor of a DAF program will have rules regarding minimum fund size, grant size, fees, investment options, and other guidelines. Donors should consider these carefully before establishing a DAF.
Invest
DAF funds can be invested, in accordance with sponsoring organization policies, until such time the advisor recommends a grant.
Grant
Advisors recommend grants to qualified US public charities, like Duke, as desired. There currently is no tax code requirement for DAFs to make minimum distributions or to distribute any of the DAF’s assets within a specific amount of time, but some sponsors may have requirements regarding the size and/or frequency of distributions.
When making a grant to Duke, the sponsoring organization may need Duke’s mailing address and Tax ID.
Mailing Address
Alumni and Development Records
Duke University
Box 90581
Durham, NC 27708-0581
Tax ID
56-0532129
Receipts
As the donor receives a tax deduction each time a contribution is made to the DAF, there is no tax deduction received at the time each grant is made. As such, no tax receipts are issued at the time of a grant.
Benefits
Donors and their family members cannot receive a personal benefit from DAF grantmaking. A donor cannot receive a premium in exchange for a DAF payment, nor can a donor use a DAF to pay for tickets or ticket rights.