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Understanding and Tapping Into Donor-Advised Funds

March 24, 2021
 Understanding and Tapping Into Donor-Advised Funds 1

Money continues to flow into donor-advised funds at a record-setting pace. Donors to Fidelity Charitable put $14 billion into their accounts last year, and just over $9 billion was directed to charities, the group recently reported.

Donor-advised funds have been a mainstay of community foundations for generations, but in the past decade or so their popularity has exploded. That surge has been driven in large part by financial-services companies entering the field and spinning off charitable arms to manage them.

Individuals who open these accounts, which are invested and can continue to increase in value, can take a tax deduction the same year they make a contribution. But they can wait as long as they wish to direct the money to charity.
Critics say DAFs delay or prevent money from reaching charities, that sorely need support. The funds also make it more difficult for fundraisers to build ties with donors.

Once a donor transfers money into a fund, the sponsoring organization becomes the legal owner and the legal donor. When a gift is made from the account, it can be difficult to determine who directed the gift to be made. Some account holders choose to remain anonymous when making a gift leaving nonprofits no way to thank them or develop a relationship with them.

To help you stay on top of the latest information and advice on DAFs, we’ve gathered news, opinion, and how-to articles that explain how they work, how they are changing philanthropy, and how to connect with those who open these accounts.

Read other items in this Understanding and Tapping Into Donor-Advised Funds package.