Donor-Advised Funds Pay Out Far More Than People Think

Full analysis

Donor-advised funds (DAFs) — accounts where donors contribute money or assets, get an immediate tax deduction, and then recommend grants to charities over time — distributed 25.2% of their total assets in 2024, more than three times the 8.1% payout rate of private charitable foundations. According to the DAF Research Collaborative, total grants from DAFs rose from $54.77 billion in 2023 to $64.60 billion in 2024. Major sponsors also have formal policies requiring periodic grant activity: Fidelity Charitable requires a grant at least every two years, Vanguard Charitable every three years, and National Philanthropic Trust requires at least one $250 grant every 36 months.

For a donor 50 or older thinking about charitable giving, DAFs offer a practical timing benefit: you can contribute appreciated stock or other assets before year-end to lock in the tax deduction, then take more time to decide which charities receive the money. This separation of the tax decision from the giving decision is especially useful when selling a business or real estate, since a DAF can accept a complex asset before the sale closes and then distribute grants to multiple charities afterward. DAF succession planning — deciding what happens to the remaining balance at death — is widely underdeveloped, and donors are encouraged to revisit their default plan with a financial advisor or estate planner.