Give when you can. Grant when it’s needed.

Sue Fegelein and Jon Wade at LiftUp
The Steamboat Group Donor-Advised Fund at the Yampa Valley Community Foundation has provided essential funds to ensure we have fresh fruits and vegetables in our Food Banks.

A donor-advised fund, or DAF, is a giving vehicle established at a public charity and LiftUp Routt County is able to process these gifts! A DAF allows donors to make a charitable contribution, receive an immediate tax deduction and then recommend grants from the fund over time. Donors can contribute to the fund as frequently as they like, and then recommend grants to their favorite charities whenever makes sense for them.

  • You make an irrevocable contribution of personal assets including cash, stock, real estate and more.
  • You immediately receive the maximum tax deduction that the IRS allows.
  • You name your donor-advised fund account, advisors and any successors or charitable beneficiaries.
  • Your contribution is placed into a donor-advised fund account where it can be invested and grow tax-free.
  • At any time afterward, you can recommend grants from your account to qualified charities.

The accounts are controlled by a nonprofit, called a sponsoring organization, that invests the assets and manages the donor’s account. Community foundations, such as the Yampa Valley Community Foundation, often serve as sponsoring organizations and so do nonprofit arms of financial-services firms, such as Vanguard Charitable and Schwab Charitable. Once a fund is established, donors tell the sponsoring organization which nonprofits they’d like to donate to from their accounts.

A Quick Donor-Advised Fund Q&A

Are all DAFs alike? No. Every sponsoring organization has its own rules and procedures that affect the funds someone opens. Generally funds fall into three categories: commercial, community-foundation, and single-issue funds.

Who controls the money in a DAF? The sponsoring organization. A donor who makes a contribution to an account cedes control of the asset, it’s irrevocable. After the contribution is made, the donor can advise the sponsor when and where to make gifts. The organization almost always abides by the donor’s wishes, as long as the intended recipient is a qualifying tax-exempt organization.

Can DAFs be handed down to heirs? It depends on the sponsors. Some don’t allow it, but others are fine with unlimited succession, meaning donors can pass accounts down through generations. Often a primary adviser is named as an heir, with a contingent adviser serving as backup.

If an account is not passed to a successor, what happens to the money? When donors set up accounts, sponsors recommend that they either name successors or select charities to receive the remainder of their funds upon their death.

Aren’t gifts from donor-advised funds anonymous? Not usually. Some people choose donor-advised funds to cloak their identities but anonymous gifts are relatively rare, only 3% of donors request anonymity.

Donor-Advised Fund Resources

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