A Donor-Advised fund [DAF] is a tax-deductible financial account that you can use to support any tax-exempt charitable organization.
In their article about donor-advised funds [DAF], Fidelity Charitable stated, “With a DAF, you can set aside money for charity by contributing (donating) funds into your DAF account via your bank, credit card, or appreciated assets (e.g., stock, crypto, etc.). Once contributions are received by your DAF sponsor, they are eligible to be included as deductions on your income taxes. Donations can be one-time, or they can be recurring. All donations to your DAF are on one annual statement for your taxes, no matter what method you choose to give” (Fidelity Charitable, 2022).
There are several benefits to opening a donor-advised fund, including funds that can be invested and grow tax-free, enabling sharing of charitable funds with friends to give to charities, and you can add instructions for legacy gifts. Most importantly, a DAF makes donating to charities easier!
Once you have established an account, you can contribute cash, stocks, or non-publicly traded assets, including cryptocurrency. Your funds can then be invested in social ventures, and if there’s a return on the investment, that return goes back into the DAF to grow it, which can significantly increase your impact. Donations can be made to US-based charities, US places of worship, and International NGOs.
What is a donor-advised fund? Fidelity Charitable. (n.d.). Retrieved September 26, 2022, from https://www.fidelitycharitable.org/guidance/philanthropy/what-is-a-donor-advised-fund.html