Donor-Advised Fund (DAF)

Because they are easy and tax-savvy, donor-advised funds (DAF) are the fastest-growing charitable giving vehicle. A donor-advised fund is a charitable investment account that individuals establish for the sole purpose of supporting charities over time. The funds (cash, stocks, other assets) are invested for tax-free growth. The individual directs donations to the charities of their choice.

What are the advantages of a donor-advised fund?
• Donors can take an immediate tax deduction when they contribute assets to a DAF.
• Funds contributed to a DAF are invested for tax-free growth.
• Donors can recommend grants from the fund to any IRS-qualified charities like WIN.
• Contributions to DAF accounts can be made during years of high income to minimize tax burden, with grants made to charities over time.
• Giving is consolidated and record-keeping is maintained by the sponsoring organization. 

How does a donor-advised fund work?
• Donors make irrevocable tax-deductible contribution(s) of cash, stock, or other assets to account held by a sponsoring organization, community foundation, or financial institution (e.g., Fidelity, Vanguard) and receive a tax receipt and tax benefits when funds are deposited into the DAF.
• The DAF sponsoring organization oversees the funds as they grow tax-free.
• While the sponsoring organization owns the fund, the account holder or designated heir (successor grant advisor) retain advisory privileges over distribution of single or recurring donations to eligible charities like WIN.
• Consult your financial adviser and/or tax adviser to determine if a DAF makes sense for you and for assistance in establishing a DAF account.