Donor-Advised Fund (DAF) Frequently Asked Questions

Administrative Fees: DAFs typically charge administrative fees, which are generally lower than those of private foundations. These fees cover the management and operational expenses of the fund.

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Investment Management Fees: Depending on the investment options chosen, there may be additional fees related to the management of the fund's assets.

Choose a Sponsoring Organization: Select a public charity or financial institution that offers DAFs.

Complete the Application: Fill out the necessary forms to establish the fund, providing information about your charitable goals and preferences.

Fund the Account: Make an initial contribution, which can be in the form of cash, publicly traded securities, or other assets. Minimum contribution amounts vary by program.

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Select Investments: Choose from available investment options to potentially grow the fund's assets tax-free.

Recommend Grants: Once the fund is established and funded, you can recommend grants to IRS-qualified charitable organizations at any time.

Successor Advisors: You can designate individuals, such as family members, to become successor advisors, allowing them to continue recommending grants from the fund after your passing.

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Charitable Beneficiaries: Alternatively, you can specify that the remaining assets be distributed to particular charities upon your death.

Default Provisions: If no successors or beneficiaries are named, the sponsoring organization will typically distribute the remaining assets in accordance with its policies.

Minimum Grant Amounts: Many DAFs have a minimum grant amount, which can vary by sponsoring organization. It's important to check with your specific DAF provider for their policies.

Grant Recipients: Grants must be made to IRS-qualified 501(c)(3) public charities. DAFs cannot be used to fulfill personal pledges, pay for memberships, tickets, or other benefits, or support political campaigns.

Grant Frequency: While there is no federal requirement for DAFs to make grants within a specific timeframe, some sponsoring organizations may have policies encouraging regular grant activity.