What is a Donor-Advised Fund (DAF)?

For many supporters, philanthropy is both personal and purposeful. You want your generosity to reflect your values, support the causes you care about and make a meaningful difference in the community. A donor-advised fund, often called a DAF, can be a simple, tax-advantageous way to do just that.  

When you contribute cash, stock or other assets to a donor-advised fund (DAF), you qualify for an immediate tax deduction. Your contribution can then be invested to grow tax-free, allowing you to recommend grants over time to any IRS-qualified public charity.  

Greater Twin Cities United Way now makes it easier to give from your DAF directly on our website through DAFpay, powered by Chariot. With this new giving option, you can recommend a grant from your DAF in just a few clicks, helping meet urgent needs and fuel lasting change for neighbors across the Twin Cities. 

WHAT IS A DONOR-ADVISED FUND? 

A DAF works like a personal savings account for charity. You can contribute cash or assets today, claim an immediate tax benefit, and invest the balance for tax-free growth. Then, you can recommend grants to your favorite nonprofits whenever the timing is right. 

WHY GIVE THROUGH A DAF? 

Increase your giving 

• Tax savings: Contributing to a DAF gives you an immediate charitable deduction. Plus, when you donate appreciated assets like stocks, you can eliminate capital gains taxes while your investment grows tax-free. 
• Easier giving decisions: Since you have already set these funds aside for charity, your donations never compete with daily living expenses. This separation allows you to support your favorite causes confidently and generously. 

Simplify your philanthropy 

• Streamlined giving: A DAF can help simplify your charitable recordkeeping with one portal and one tax receipt for contributions to the fund. 
• Flexible options: You can choose from a wide variety of DAF providers, including major brokerages, local community foundations, and independent charities. No matter which provider you choose, tools like DAFpay streamline your giving by offering a fast, "express checkout" experience. 

Deepen your impact 

• Goal-oriented giving: You can use your DAF to plan ahead, set giving goals and recommend grants to the organizations you care about throughout the year.
• Consistent support: A DAF can help you take a more proactive approach to philanthropy, making it easier to support nonprofits with greater consistency over time.

Please note: Contributions to DAFs are irrevocable and can only be used for permissible gifts to eligible charities, as approved by the DAF provider. Thoroughly review the rules and limitations of any DAF provider you choose to work with and consult your professional tax, accounting and financial advisors.