If you have a Donor Advised Fund you can make an important difference for hungry kids.
No child should go hungry in America. But millions don't know where their next meal is coming from.
Join Team No Kid Hungry by giving through your Donor Advised Fund and connect kids to the meals they need to thrive.
The DAF Direct widget will take you to your Donor Advised Fund for:
- Fidelity Charitable
- Schwab Charitable
- BNY Mellon
Or click below for one of the following and make Share Our Strength your Donor Advised Fund charitable designation.
Silicon Valley Community Foundation
Renaissance Charitable Foundation
Donate Through Your Donor Advisor Fund
There are many types of donations, including personal donations, asset transfers, foundation giving, and more. Another type of donation vehicle is called a donor-advised fund (DAF). If you are not familiar with these or if you have wondered about the difference between a DAF and another donation type, this information will help.
What is a Donor Advised Fund?
A donor-advised fund is basically a philanthropic version of an investment account, the purpose of which is to financially support nonprofit organizations that align with your heart's passion. Cash, securities, and assets can each be donated to a nonprofit and the tax benefit realized with each deduction for the tax year in which they were given. But with donor-advised funds, these contributions are held where they earn tax-free interest and thus increase in overall value until portions are granted to public charities with your recommendation. The contributions are able to be deducted from taxes immediately, even though the amount (or a smaller portion of the overall value) may not be granted to a charity during the same tax period as the contribution was made.
Did You Know...?
Donor-advised funds are the fastest-growing charitable giving vehicle in the United States. This is because DAFs are one of the most tax-advantageous ways to give. They're also easy to manage.
How Does a Donor Advised Fund Work?
This step-by-step process is the easiest way to describe how DAFs work.
1. You identify the donor-advised fund you would like to use (as you can see below, there are many from which to choose).
2. You select your fund advisor(s), potential successors, and public charity beneficiaries.
3. You make contributions to the donor-advised fund in the form of cash, securities, real estate, or other assets of value.
4. Your fund contributions become eligible for investment where they can grow tax-free.
5. You claim the entire tax benefit/deduction in the immediate year of your contribution.
6. You make grant-giving recommendations from the DAF account to IRS-approved charities.
It is important to note that all fund contributions are irrevocable. Once placed in the fund and claimed for tax purposes, they must be granted at some point to a nonprofit organization.
What are the Benefits of a DAF?
1. You Can Contribute a Variety of Assets
Donating cash to your favorite nonprofit is easy, but transferring stock or even more complex assets is not. With a DAF, however, transferring more complicated assets over to the fund is more seamless. Contributions can include personal assets such as cash, securities (stocks, bonds, and mutual funds), proceeds from life insurance, IRAs, 401Ks, private business interests, personal property, cryptocurrency, and even private company stock, all of which are eligible for an immediate tax deduction.
2. Realize Immediate Tax Benefits
As stated, you can claim the tax benefits in the immediate year of your fund contribution even though the funds may pass through to the receiving nonprofit in a subsequent year.
3. Benefit from Tax-Free Growth
The process is similar to how many people structure their 401(K) retirement accounts. Sponsoring organizations generally have a variety of investment options, which allows you to determine your risk comfort level and develop a strategy. If you are an investment-savvy donor, you may determine your own investment strategy for your account. Many sponsoring organizations also allow you to designate a financial advisor to manage the investment of your charitable funds. The idea is to grow your contributions tax-free so that you can have more to donate.
4. Focus on Legacy Planning
What kinds of legacy do you want to leave? With a DAF, you can move your focus from donating to a charity to envisioning your legacy. Donor-advised funds can be bequeathed to beneficiaries designated in your will. You can also name a fund sponsor/advisor in your estate planning to make decisions and donations in your name upon your passing as well as making them the recipient of additional assets of value that weren't previously part of the fund. In doing so, you can positively impact multiple charitable organizations without having to name each of them in the will.
The sponsoring organization may itself allow you to transfer the contributions of the fund to successors or nonprofits as a death benefit. They may even allow you to redistribute the fund or section it off into multiple different funds that can be moved to more than one beneficiary or IRS-eligible organizations.
As you can see, donor-advised funds provide numerous advantages to those who utilize them as well as the organizations that receive the benefits. DAFs are not complicated. In fact, they provide ease of use and allow you to leverage fund sponsors and advisors who can be engaged and provide direction as much or as little as you need. At No Kid Hungry, we recognize a number of different reputable DAFs with whom we connect. If you have additional questions, please see our FAQ page or reach out to us directly.
Download a one-page DAF reference guide.
*Please note that the IRS prohibits the use of Donor Advised Funds where more than an incidental benefit is received by the donor in return (e.g. event table/tickets, purchase of auction items). This prohibition applies regardless of whether the donor pays separately for the benefits received (i.e. the “non-deductible” amount). All table/ticket and auction purchases, therefore, must be funded personally outside of a Donor Advised Fund. For further guidance, please consult with your Donor Advised Fund administrator.