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Donor-Advised Funds: An Increasingly Popular Giving Tool

Anyone who wishes to make a charitable impact today has an incredible number of tools at their disposal. However, no giving option is experiencing a surge in popularity equal to the donor-advised fund (DAF). DAFs have increased massively in the past few years, with donations to donor-advised funds more than doubling from 2020 to 2022. But what makes this giving tool so uniquely appealing?

An Immediate Tax Deduction

Contributions to a DAF qualify for an immediate income tax deduction even though the money has not actually gone to our organization yet. You can deduct up to 60% of your adjusted gross income for cash or 30% for appreciated property.

Flexible Giving and Money Management

While the deduction is immediate, the gifts themselves can be made in your own time in a way that meets your goals. You retain the right to advise on grants from the fund—you cannot insist on gifts, only recommend. Meanwhile, the donated assets are owned and administered by the fund, meaning you no longer need to manage the money as it grows tax-free inside the fund.

An Easy Way to Give Complex Assets

If you want to donate a more complex, non-cash asset that might be difficult to give us directly (or possibly an asset we can’t accept), a DAF is often a great way to donate that asset and then direct cash gifts to us.

The Best of Both Worlds

If you are exploring ways to support our organization, DAFs provide a happy medium—it’s easy to contribute, provides tax benefits, offers professional money management, allows input on gifts, and provides peace of mind in knowing you’re making an important impact.

The Right Tool for the Task

Whether you’re a tax-savvy investor and donor looking to get the most out of this flexible gift arrangement, or a donor interested in a simple way to segregate charitable funds and have a say in where and when contributions get made, it is easy to see why more and more people are choosing donor-advised funds as their tool of choice for charitable giving.