Donor-Advised Fund Law and Legal Definition
Donor-advised funds (DAFs) are charitable giving accounts offered by a sponsoring organization. It is considered as a simple and less expensive alternative to private foundations. Donors contribute tax-deductible assets to these accounts, advice the sponsoring charity on how to use the assets beneficially. They can recommend grants from their accounts to charitable organizations of their choice. The donations made to the account are an irrevocable donation to the organization that holds the account. The sponsor maintains the record keeping and can protect a donor's identity if that is requested. The money in the donor-advised fund is disbursed according to donors’ directions. Donor-Advised funds are also known as Charitable Gift Account.