Donor Advised Funds
Local Issues. Local Solutions.
Donor advised funds (DAFs) are a unique philanthropic tool that allow donors to establish charitable accounts at institutions, such as community foundations, and remain involved in supporting the issues and causes they care about. When a DAF is established, donors relinquish personal control of the funds to the community foundation, which then oversee and manage these funds on behalf of the families, groups, or individual donors. All funds distributed from these DAFs must be used for qualified, charitable purposes, and community foundations often have the discretion to direct DAF funds toward the most pressing issues in their communities.
Beyond the support they provide for important local issues, a 2014 Urban Institute survey on community foundations, commissioned by the Council, illuminated multiple other meaningful functions of DAFs. Importantly, DAFs support long-term solutions for tough community issues, serve to encourage civic and philanthropic engagement in communities—especially when several generations of family members are involved, and offer the flexibility to respond quickly to emergencies and unpredictable issues.
Despite these significant benefits of DAFs in communities across the country, some commentators, academics, and even some policymakers, have expressed skepticism that undermines the fundamental and long-lasting value of endowed philanthropy. This skepticism has sparked misguided policy conversations and short-sighted proposals to regulate this philanthropic tool in a way that could considerably impede on the generosity of individuals to give back to, and strengthen, their communities.
The Council strongly opposes payout requirements for DAFs. We are working extensively with our colleagues in the field to engage with lawmakers and protect the positive impacts of philanthropy in your communities. We continue to highlight the enthusiasm of the majority of community foundations to voluntarily institute strict operating policies and preserve the highest degree of integrity and excellence by engaging in peer-regulation through the National Standards for U.S. Community Foundations® program.
Policy Proposals that Impact DAFs:
Council Issue Paper:
The Council Takes Action:
- Council Donor-Advised Fund Letter of Support
- Council Participates in June 2015 Urban Institute Conference on Donor Advised Funds: How Have They Changed Philanthropy?
- Op-ed, June 2015—New Regulations for Philanthropy?
- Op-ed, Feb. 2015—A Vital Pipeline: How Donor Advised Funds Engage New Donors and Boost Communities
- Op-ed, Oct. 2014—Taxes and Charity: A View From the Foundations
- Op-ed, Aug. 2013—Charitable Giving is More Than Just a Tax Deduction
- Council Response to DAF Proposal Timeline: 2013-2014
Council Colleagues Speak Out:
- High Noon for Charity?—Joanne Florino, June, 2015
- Who’s Afraid of DAFs?—Jack Shakely, Summer 2015
- Dave Camp’s Tax Reform Could Kill Community Foundations—Gene Steuerle, April 2014
- Just What Do Charitable Endowments, Advised Funds, & the Mutual Fund Industry Provide?—Gene Steuerle, January 1999
Promoting the Value of DAFs for Your Community:
- Handout: The Power of Community Foundation DAFs
- Handout: Community Foundation DAF Impact Map
- Key Talking Points and Terms
Studies and Research:
- 2014 Urban Institute Survey of Community Foundations: Overview
- 2014 Urban Institute Survey of Community Foundations: Local Stories
- Webinar Recording: 2014 Urban Institute Survey on Community Foundations: What we Learned and Why it Matters
- 2012 CRS Report: An Analysis of Charitable Giving and Donor Advised Funds
- 2011 Treasury Report on Supporting Organizations and DAFs
- 2009 Council on Foundations Survey: DAFs Provide the Majority of Grant Funds Awarded by Community Foundations
Other Resources: