Twelve Things DAF Holders Should Review Now

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A donor-advised fund (DAF) is an account where you contribute money or assets, take an immediate tax deduction, and then recommend grants to charities over time. Many people set one up years ago and haven't revisited the details since. Financial advisor Ken Nopar lays out twelve practical issues worth checking: succession plans (who controls the account after you die) are often stale and the named successor may not even know they were chosen; assets beyond cash and stock — including real estate, private business interests, and cryptocurrency — can often be contributed; and naming a DAF as the beneficiary of a retirement account can help heirs avoid a large tax bill that would arise if they inherited the account directly.

Other reminders include bunching contributions in high-income years before retirement to maximize the tax deduction, scheduling recurring grants so charities receive donations throughout the year rather than just at year-end, and knowing that DAF grants can generally cover annual membership dues or fulfill pledges as long as the fund's grant letter doesn't reference the pledge. Donors who are unhappy with their current DAF sponsor's fees, investment options, or grant restrictions can usually transfer the account to a different sponsor. Nopar notes that DAF sponsors — which are charities themselves — rarely prompt donors to revisit these issues, so the review most often has to be self-initiated.