Donor-advised funds (DAFs) are investment vehicles established by non-profit organizations that allow individuals to make an irrevocable, tax-deductible grant. These funds have experienced a veritable explosion in popularity fueled primarily by the charitably inclined. Part of the cause for this phenomenon is the developing ability of major funds to handle complex assets like real estate, stock, or even cryptocurrency. In 2017 alone, Fidelity Charitable converted over $900 million in “non-cash” assets into funds ready to donate to charities via its DAF. The year prior, Fidelity received just under $800 million in these assets. Carol Kroch, national director at Wilmington Trust, notes that because individuals are allowed to donate their non-cash assets to a DAF and avoid taxes, unlike gifts provided directly to a charity of a private foundation, “donor-advised funds have been a nice place to deal with the charitable gift of complex assets.”
See Abby Schultz, Donor-Advised Funds Become Popular Philanthropic Tools, Barron’s, February 15, 2018.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.
