What is a Donor Advised Fund?
Last updated November 15, 2023
Introduction:
Donor Advised Funds (DAFs) have emerged as a popular way to manage charitable giving. This article introduces the concept of DAFs, explaining their purpose and how they function as a philanthropic tool.
Key Points:
- Definition of DAF: A DAF is a philanthropic vehicle established at a public charity. It allows donors to make a charitable contribution, receive an immediate tax benefit, and then recommend grants from the fund over time.
- Setting Up a DAF: To set up a DAF, donors contribute to a fund held by a sponsoring organization and advise on how those funds should be distributed.
- Tax Benefits: Contributions to a DAF are tax-deductible in the year they are made.
- Flexibility in Giving: Donors can advise on the distribution of funds to various charities over time, offering flexibility and time to make thoughtful giving decisions.
Conclusion:
DAFs offer a flexible and tax-efficient way to manage charitable giving. They are an excellent option for donors who want to take a more planned approach to philanthropy.
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