A Personal Note on Donor Advised Funds

By Robert Martin

With thousands of donors expected to participate in DAF Day 2026 on October 8, I write as an individual who has had a good experience with this relatively new form of giving. My wife Katherine and I are genuinely pleased with our personal DAF. Before we set up a DAF, about three years ago, I participated very little in our charitable giving; I felt overwhelmed by the number of worthy and important causes, with procrastination and inaction as the result. Katherine has always been philanthropic, with a mixture of due diligence about the organizations seeking support and a degree of impulsiveness that I value. After we created our DAF, I’ve been far more comfortable and more involved in our charitable giving.

Basically, a DAF is like a charitable investment account for the sole purpose of supporting charitable organizations you care about. It is not permissible to use these funds for private benefit. They are the fastest-growing charitable giving vehicles in the United States because they are one of the easiest and most tax-advantageous ways to give to charity.

The first DAFs were created in the 1930s by large community trusts and were made more flexible and attractive through the 1969 Tax Reform Act and a series of treasury regulations in 1972. In 1991, the Fidelity Gift Fund was established, soon joined by others, making it possible for individual donors to take advantage of the attractive features of this kind of fund.

The way it works now is extremely simple. You establish a giving account and then donate cash, stocks, or various other assets for an immediate tax deduction. The fund potentially grows while you’re deciding which charities to support, and any growth in the fund is tax-free. When you’re ready, you instruct the fund administrator to send a grant of whatever amount you choose to a 501c3 charitable organization of your choice. For some DAFs, there are minimums to create the fund and minimum gifts, but for others, there are no minimums.

These funds are invested, and therefore increase or decline with the market; different DAFs have different arrangements for allowing the fund creators to play a role in deciding the investment arrangements. There is an administrative fee for creating and maintaining a DAF. There is a wealth of information online about DAFs which you should consult if you are thinking of creating one.

For me, the great advantage of the DAF is that it separates the decision to use part of our assets for charitable purposes from the considerations of exactly which organizations to support, at what levels, and when. Once funds are placed in the DAF, they can be used only for charitable purposes, and therefore they constitute a tax-deductible contribution at once, even while we take our time to decide how exactly they are to be used. There is also an attractive “legacy planning” feature of DAFs: You can specify one or several individuals who will make gift decisions for the balance in the account after the death of the DAF creator(s).

As Director of Development at CVKH, I can’t help closing with the appeal to fellow DAFers: Please keep Camphill Village Kimberton Hills in mind!