Donor Advised Funds

June 14, 2018

A donor advised fund (DAF) is a type of charitable giving fund that is established by a donor with an eligible charitable sponsoring organization (i.e. a community foundation) to support a cause (or causes) that the donor cares about. A donor advised fund allows the donor to remain involved and active in charitable giving by retaining “advisory privileges” to recommend how the sponsoring organization should make grants from that fund.

DAFs were legislatively addressed in the Pension Protection Act (PPA) of 2006 and it remains the current law to this day. When the PPA became law, it provided the first legal definition by Congress of a DAF as any fund or account: 1) which is separately identified by reference to the contributions of a donor or donors; 2) which is owned and controlled by the sponsoring organization, like a community foundation; and 3) with respect to which a donor or person appointed by the donor has or reasonably expects to have advisory privileges with respect to investments or distributions. The PPA also laid out basic rules and criteria for making grants from DAFs.  

The Council strongly opposes payout requirements for DAFs. 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 Colleagues Speak Out:

Promoting the Value of DAFs for Your Community:

Studies and Research:

Other Resources: