What is a donor-advised fund?
Think of it as a charitable savings account: you put money in and get the tax deduction now, it grows tax-free, and you give it to the nonprofits you choose over time.
How a donor-advised fund works
Three simple steps -- donate, grow, then grant.
Donate
Give cash or assets -- and get the tax break now.
You contribute cash, stock, or other assets to a fund at a sponsor. You get an immediate tax deduction for the full value the year you give -- even though the money may not reach charities for years.
Grow
Invest it; let it grow tax-free.
The money is invested and grows tax-free inside the fund. Donating appreciated stock directly (instead of cash) means you skip capital-gains tax, so more goes to charity.
Grant
Recommend grants to nonprofits, on your timeline.
Whenever you're ready -- months, years, or decades later -- you recommend grants to the charities you choose. The sponsor handles the paperwork and confirms each nonprofit qualifies.
Why people use them
An immediate tax deduction
Deduct the full gift the year you contribute, even if you give the money to charities much later.
Tax-free growth
Assets grow tax-free inside the fund, so there's potentially more to give over time.
Donate more than cash
Many sponsors accept appreciated stock, real estate, or business interests -- often far more tax-efficient than giving cash.
Give on your timeline
Separate the tax decision from the giving decision. Take your time choosing the right causes.
Simplify your giving
Support many charities from one account. One tax receipt; the sponsor handles compliance and records.
Build a family legacy
Name family members as successor advisors to keep giving going, and grant anonymously if you prefer.
The kinds of sponsors
A DAF is run by a sponsoring organization. They come in a few flavors -- tap one to see those sponsors in the directory.
National sponsors
The charitable arms of financial firms (Fidelity, Schwab/DAFgiving360, Vanguard) plus large independents like National Philanthropic Trust. Low minimums, broad asset acceptance.
Community foundations
The original DAF pioneers. Local and place-based, with staff who know the charitable needs of their region.
Faith-based & mission sponsors
Organizations built around a faith tradition or cause, helping donors give in line with their values.
University & public foundations
Universities, hospitals, and issue- or region-focused public charities that run DAFs to advance their mission.
Things to know first
DAFs aren't perfect, and we won't pretend otherwise. The honest trade-offs:
Contributions are irrevocable
Once you give, the money is committed to charity. You can't take it back for personal use.
You advise -- the sponsor controls
Legally, the sponsoring organization owns the assets. You recommend grants; they have final authority (in practice they almost always follow your recommendation to qualified charities).
No legal payout requirement
Unlike private foundations (which must pay out ~5% a year), a DAF has no required minimum -- money can sit indefinitely. Critics call this “warehousing wealth.” It's exactly why this directory surfaces each sponsor's payout rate.
Fees vary a lot
Sponsors charge an administrative fee plus investment fees, and they differ meaningfully -- which is why comparing matters.
A note on taxes: cash gifts are generally deductible up to 60% of your adjusted gross income (AGI), and appreciated stock up to 30%.
Quick example. Say you own stock you bought for $2,000 that's now worth $10,000:
- Sell it, then donate the cash: you first owe capital-gains tax on the $8,000 gain, so less reaches charity.
- Donate the stock straight to your DAF: you owe $0 capital-gains tax, deduct the full $10,000, and the nonprofits get the full value.
Not tax advice; figures are illustrative. Check with your own advisor.
Common questions
How much can I deduct on my taxes?
Generally up to 60% of your adjusted gross income (AGI) for cash gifts, and up to 30% of AGI for appreciated securities like stock. This isn't tax advice -- confirm specifics with your own advisor.
How is a DAF different from a private foundation?
A private foundation must pay out about 5% of its assets every year and carries heavy administration. A DAF has no required payout, far less paperwork, and accepts more types of assets -- but you advise rather than control, and the sponsor has final legal say.
How long can money sit in a DAF?
There's no federal deadline to grant the money out. Many sponsors set their own activity rules (Fidelity Charitable, for example, asks for at least one $50 grant every two years to keep an account active).
What happens to my fund when I die?
You typically either name a successor advisor (often family) to keep recommending grants, or have the remaining balance distributed to charities you've chosen. Most people decide this when they open the account.
Do I have to give the money away right when I contribute?
No -- that's the point. You get the tax deduction the year you contribute, then take your time recommending grants to nonprofits whenever you're ready.
Ready to pick a DAF?
If a donor-advised fund sounds right for you, the next step is choosing where to open one. Compare 150 U.S. sponsors on fees, payout rate, and how fast they send your money to nonprofits.