# Donor-advised fund *Charitable giving vehicle administered by a public charity (United States)* In the United States, a donor-advised fund (DAF) is an account-based vehicle for charitable giving. A public charity runs it and manages donations on behalf of individuals, families or organizations.[^1] A participant, whether a person or an organization, opens an account with the fund and places cash, securities or other financial instruments in it. The participant gives up ownership of what is deposited. The participant keeps advisory privileges over how the account is invested and over which charities receive its distributions.[^2] The Wikipedia article on the subject characterizes the use of such a fund as a legal form of tax avoidance.[^3] Donors use the vehicle to route money to charities instead of giving directly or setting up a private foundation.[^4] ## Details The fund is held as an account with a sponsoring organization, which is usually a public charity. A donor who gives to it receives a tax benefit at once and keeps the ability to recommend grants in later years.[^5] The contribution cannot be revoked, and it must ultimately reach a 501(c)(3) organization.[^6] The source lists three advantages for donors who make grants through the fund: - administrative convenience, because the sponsor handles paperwork after the first donation; - lower costs, compared with a private foundation, whose operation takes around 2.5% to 4% of its assets each year; - tax advantages relative to individual giving.[^7] Both a donor-advised fund and a private foundation can accept unusual or illiquid assets, such as part ownership of a private company, art, real estate, or partnership shares. For some of these gifts, depending on the gift, the donor-advised fund allows higher deductions.[^8] Control differs between the two. The founders or board of a private foundation decide where its giving goes, within broad legal limits. The donor to a donor-advised fund can only advise the sponsoring organization. The source describes as rare, but possible, a sponsor disregarding what the donor intended.[^9] Most donor-advised funds may make grants only to IRS 501(c)(3) organizations or their foreign equivalents. That limit excludes most kinds of gifts to individuals and most scholarships, both of which a private foundation can make more easily.[^10] ## History The New York Community Trust established the first donor-advised fund in 1931, and a second fund followed in 1935. Commercial sponsors, educational institutions and independent charities later began offering such accounts.[^11] As of 2015, the source reports that donor-advised funds were the fastest-growing charitable giving vehicle in the United States. At that date, more than 269,000 accounts held over $78 billion in assets.[^12] ## Notes [^1]: Wikipedia, *Donor-advised fund* (rev. 1378867222, retrieved 2026-10-26), lead — defines the vehicle as administered by a public charity for organizations, families or individuals in the United States. https://en.wikipedia.org/wiki/Donor-advised_fund [^2]: Wikipedia, *Donor-advised fund* (rev. 1378867222, retrieved 2026-10-26), lead — describes opening an account, the assets deposited, surrender of ownership, and the advisory privileges the donor retains. https://en.wikipedia.org/wiki/Donor-advised_fund [^3]: Wikipedia, *Donor-advised fund* (rev. 1378867222, retrieved 2026-10-26), lead — characterizes use of the fund as a legal form of tax avoidance. https://en.wikipedia.org/wiki/Donor-advised_fund [^4]: Wikipedia, *Donor-advised fund* (rev. 1378867222, retrieved 2026-10-26), "Details" — describes the fund as an alternative to direct giving or to creating a private foundation. https://en.wikipedia.org/wiki/Donor-advised_fund [^5]: Wikipedia, *Donor-advised fund* (rev. 1378867222, retrieved 2026-10-26), "Details" — describes the account at a sponsoring organization, the immediate tax benefit, and the advisory privileges over later disbursement. https://en.wikipedia.org/wiki/Donor-advised_fund [^6]: Wikipedia, *Donor-advised fund* (rev. 1378867222, retrieved 2026-10-26), "Details" — states that the contribution is irrevocable and destined for a final 501(c)(3) organization. https://en.wikipedia.org/wiki/Donor-advised_fund [^7]: Wikipedia, *Donor-advised fund* (rev. 1378867222, retrieved 2026-10-26), "Details" — lists administrative convenience, cost savings with the 2.5%–4% annual foundation cost figure, and tax advantages. https://en.wikipedia.org/wiki/Donor-advised_fund [^8]: Wikipedia, *Donor-advised fund* (rev. 1378867222, retrieved 2026-10-26), "Details" — states that both vehicles accept illiquid assets and that the fund has higher deductions for these gifts, depending on the gift. https://en.wikipedia.org/wiki/Donor-advised_fund [^9]: Wikipedia, *Donor-advised fund* (rev. 1378867222, retrieved 2026-10-26), "Details" — contrasts foundation control with the donor's advisory role and notes that the sponsor could, though rarely, ignore donor intent. https://en.wikipedia.org/wiki/Donor-advised_fund [^10]: Wikipedia, *Donor-advised fund* (rev. 1378867222, retrieved 2026-10-26), "Details" — states the 501(c)(3)/foreign-equivalent limit and its exclusion of most gifts to individuals and scholarships. https://en.wikipedia.org/wiki/Donor-advised_fund [^11]: Wikipedia, *Donor-advised fund* (rev. 1378867222, retrieved 2026-10-26), "History" — states the 1931 New York Community Trust origin, the second fund in 1935, and later sponsors. https://en.wikipedia.org/wiki/Donor-advised_fund [^12]: Wikipedia, *Donor-advised fund* (rev. 1378867222, retrieved 2026-10-26), "History" — states the 2015 figures of more than 269,000 accounts and over $78 billion in assets. https://en.wikipedia.org/wiki/Donor-advised_fund