If you regularly donate to nonprofits, you may have come across the term “Donor-Advised Fund” or DAF. But what exactly is a DAF, how does it work, and how can setting one up help you on your philanthropic journey? Let’s break it down. 

What is a Donor-Advised Fund, Anyway? 

A donor-advised fund (DAF) is a giving vehicle administered by a public charity created to manage donations on behalf of organizations, families, or individuals. 

In other words, it’s a special account just for giving. If you have a donor-advised fund, you can make a contribution to it at any time, receive an immediate tax deduction, and then recommend grants to nonprofits from the donor-advised fund whenever you like. 

How it works 

Here’s the thing: donor-advised funds come with a ton of benefits, making them appealing for many types of donors. 

  1. Simplicity: Keeping track of your charitable donations can get messy, especially if you give to multiple organizations. A DAF simplifies this by centralizing all your donations in one place. You can easily manage your giving and see your impact without having to deal with receipts from every single charity. For example, if you set up your DAF at RSF, you’ll gain access to a portal where you can easily see every grant you’ve authorized in the past, view and save tax receipts, and make new grant recommendations with the click of a button.  
  1. Security: RSF does a thorough vetting to make sure that recipient organizations are mission-driven. This ensures that granted funds will be used charitably towards the intended cause.  
  1. Flexibility: With a DAF, you don’t have to decide where to donate everything right away. You contribute to your fund, get the tax benefit, and then you can take your time to decide where to send those donations. A DAF offers you the flexibility to learn about new causes or organizations, consult friends or loved ones about your giving strategy, or plan out your giving over several years. 
  1. Family involvement: A DAF is a great way to bring your family into the conversation about philanthropy. You can involve your kids, grandkids, or other family members in your decision-making process, teaching them about giving and leaving a charitable legacy for the future. 
  1. Anonymity (if you want it): If you prefer to give quietly, many DAFs (including RSF’s) allow you to make anonymous donations to charities. You can choose to stay out of the spotlight while still making a difference. 
  1. Tax Benefits: Did we mention that when you contribute to a DAF, you can claim the tax break immediately? Bonus! 
  1. Double impact: DAF clients can activate their assets to directly fund social enterprises by investing them in RSF’s Social Investment Fund.  

Set up a DAF at RSF 

  1. Do your research. Read our quick DAF overview and program guide to make sure that you have all the information you need to get started.  
  1. Set up your fund. Once you’re ready to get started, set up a DAF with RSF in just ten minutes by filling out this form. 
  1. Make an initial contribution. Review RSF’s Giving Guide for instructions on how to make the first contribution to your DAF. RSF can accept gifts by check, credit card, ACH, wire, public equities, and cryptocurrency. We can also accept bequests, distributions from retirement plans, and legacy gifts. RSF DAFs can be set up with a minimum initial contribution of $5,000. After that, there is no minimum contribution amount.  
  1. Get Your Tax Deduction: When you contribute, RSF will send you an acknowledgement letter that includes RSF’s tax ID. This allows you to claim a tax deduction right away, even if you haven’t yet chosen a grant recipient to support through your DAF.  
  1. Recommend Grants: Once the money is in your DAF, you can recommend grants to your favorite charities through RSF’s client portal. These grants are “donor-advised,” meaning you (yes, you!) decide which organizations receive the funds. There’s no rush—take your time to choose the causes that are important to you. 

The Bottom Line 

A DAF is a flexible tool for anyone looking to manage their charitable giving more effectively. By allowing you to make contributions, get a tax deduction, and then decide where to send the funds over time, DAFs give you the ability to make smarter, more strategic donations. Whether you’re trying to save on taxes, streamline your giving, or involve your family or others in philanthropy, a DAF can help you achieve your charitable goals. 

Want to learn more about what DAFs look like at RSF? Visit the DAF page of RSF’s website. 

Ready to set up a DAF at RSF? Click here to open your DAF in just a few minutes!