Donor Advised Fund

A donor-advised fund (DAF) is a giving vehicle established with a community foundation, investment advisor, or bank trust department.

• A DAF allows donors to make a charitable contribution, receive an immediate tax deduction, and then recommend grants from the fund over time.
• Donors recommend grants to nonprofits, including faith-based and educational institutions, for charitable purposes only.
• Grants go to public non-profit organizations that are recognized by the IRS. No grants to individuals are allowed.
• Although private foundations are exempt from federal income tax, their investment income is subject to an excise tax of 1 or 2 percent, whereas growth of a donor-advised fund is not taxed.
• When your estate makes a contribution to a DAF at your death, there may be estate or inheritance tax benefits, in addition to income tax benefits.

While DAFs make up only 12 percent of individual giving, today these funds are growing faster than any other form of philanthropy, according to a recent study by National Philanthropic Trust. Contributions to A DAF funds grew 20.1 percent in 2018 and assets reached $121.4 billion.*

Montreat College receives regular DAF contributions that support student scholarships and college operations each year. Here are a few examples:

• Local or regional community foundations, like the Community Foundation of Western North Carolina
• Trusts, like The Generosity Trust
• Denominational foundations, like the Presbyterian Foundation or Moravian Ministries Foundation
• Non-denominational Christian organizations, like the National Christian Foundation

* Retrieved from https://www.consumerreports.org/charitable-donations/donor-advised-funds-things-to-know