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JANUARY 20, 2025
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A True Win-win
The Benefits of Charitable Giving to Donor-advised Funds
WBY LAUREN FOLEY
hat if there were a way to support a preferred spon- soring organization while also receiving a valuable tax benefit? Giving to a
donor-advised fund (DAF) might be your answer.
DAFs offer a unique opportunity to make a significant impact while enjoying both the emotional satisfaction of giving and the financial benefits of charitable deductions. They are an ideal avenue for increasing community involvement and charitable giving, as well as obtaining a favorable tax deduction. Whether you’re an
individual or a corporation, DAFs can help streamline your charitable efforts.
A donor-advised fund, or DAF, is defined by the IRS as “a separately identified fund or account that is maintained and oper- ated by a section 501(c)(3) organization, which is called a sponsoring organization. Each account is composed of contributions made by individual donors.”
Funds are added to the account, and, like an investment, the value will fluctu- ate based on the stock market. This gives donors the potential to grow their chari- table giving over time. When the DAF increases in value or reports a gain, the gain is not taxable to the donor.
The key benefit of investing in a DAF is
“Funds are added to the account, and, like an investment, the value will fluctuate based on the stock market. This gives donors
the potential to grow their charitable giving over time. When the DAF increases in value or reports a gain, the gain is not taxable to the donor.”
501(c)(3)
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