Donor-advised fund
A donor-advised fund (DAF) is a charitable account held at a sponsoring organization where donors get an immediate tax deduction and later recommend grants to charities over time.
DAFs are popular because they separate the timing of the tax deduction (when you contribute) from the timing of the giving (when you recommend grants). Critics note that money can sit in a DAF for years before reaching working charities.
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Related terms
- Tax-deductibility — A donation is tax-deductible when the IRS lets the donor subtract it from taxable income — generally true for gifts to 501(c)(3) public charities.
- Public charity — A public charity is a 501(c)(3) that receives support from a broad base of donors and the public — the most common type of charitable organization.
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