The most common strategy for creating a Donor-Advised Fund (DAF) is relatively simple, donor-advised funds are a good option any time the donor wants to contribute (and get the tax deduction) now, but physically grants funds to the final charity at a later date.

A DAF is understood to include arrangements by which some charitable organizations (including community foundations) or an organization like IPG establishes separate funds or accounts to receive contributions from donors. In general, contributions to a DAF are treated as contributions to a public charity, thus providing donors some advantages over private foundations. 

For example, donors may claim a higher charitable contribution deduction (up to 50% of adjusted gross income (AGI) to a public charity vs. 30% to a private foundation).  Donor-advised funds are not subject to the Chapter 42 restrictions that apply to private foundations, such as the section 4941 self-dealing rules and the section 4942 annual payout requirements. 

Contact Us.