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Donor Advised Funds

A donor advised fund is a charitable giving vehicle administered by a public charity on behalf of the individuals who participate.

Upon establishing a donor advised fund, participants donate cash, securities or other marketable securities which can include real estate, business interests etc. Many people choose to establish a donor advised fund as a more effective and efficient way to make ongoing gifts, during a set period or in perpetuity, to IRS recognized nonprofits in place of a large one time gift.

A donor advised fund is recognized by the IRS as a 501(c)(3) entity. Consequently, donors receive the same charitable tax benefits as if giving directly to a nonprofit.

Donor advised funds have been growing in popularity over the years as a result of their lower administrative costs and flexibility. There are some distinct differences between a donor advised fund and foundation including privacy, tax treatment of gifts as well as grant/gift making requirements.