A Donor-Advised Fund is like a charitable savings account maintained and operated by a 501(c)(3) nonprofit (called a “sponsoring organization”). Donors can make charitable contributions to their DAF at any time, claiming the tax advantages in the year the contributions are made. They are then allowed to distribute those funds over time to the public charities of their choice. DAFs can help streamline giving plans, provide anonymity when desired, and offer flexibility with tax planning. DAFs are most often used by individual donors, but are sometimes used by companies, foundations, and churches to help manage their giving.

When you make a donation to a 501(c)(3) charity, you’re eligible for a charitable tax deduction in the year the donation was made. The deduction may vary based on the donor’s situation, but generally individual donors can deduct up to 60% of Adjusted Gross Income. If the donor would like to donate appreciated securities, the deduction can be up to 30% of AGI. The charitable tax deduction to a DAF is currently the same as when you donate to any other public charity. Consult your tax advisor for more details.

Abundance provides a specialty DAF called an Angel Fund, allowing donors to go beyond grantmaking in doing good with their charitable dollars. With an Angel Fund, donors can engage in “venture philanthropy,” significantly increasing their impact by making loans and investments in the causes and communities they care about

Yes, you may open DAFs at as many organizations as you would like. You can even transfer funds between DAFs by authorizing a grant from one to the other.

Venture Philanthropy is a new way to give, going beyond traditional grantmaking, It enables your charitable giving dollars to be used for impact investments and loans, adding a recyclable form of giving to help build stronger, more sustainable communities.

While Abundance (the sponsoring organization) has legal control over DAF assets, donors retain advisory privileges with respect to the distribution of funds, including the recommendation of private loans, impact investments, and grants. Abundance may help donors identify such opportunities, but it only distributes funds at the donor’s request.

Proceeds from successful investments and loans are returned to participating Angel Funds. Once returned, the donor can reallocate into additional investments, loans, and grants, or send back to another DAF. Returns cannot be distributed back to the donor’s personal possession.