A donor-advised fund is a charitable account you open at a sponsoring charity: you put money in, take any tax deduction then, and recommend grants to charities later. It's useful for some people and unnecessary for many. Here's how to tell which one you are.
What a donor-advised fund is
The IRS defines a donor-advised fund as "a separately identified fund or account that is maintained and operated by a section 501(c)(3) organization," called a sponsoring organization (IRS). Three features matter:
- The gift is final. Once you contribute, the sponsoring organization has legal control of the assets.
- You keep advisory privileges. You (or someone you name) recommend which charities get grants and, often, how the money is invested while it waits.
- No personal benefit. The IRS can impose excise taxes on sponsors, managers and donors when DAFs are used to provide improper benefits (same source).
Sponsors include the charitable arms of large investment firms, community foundations, and some religious and cause-specific charities. They differ on minimums, fees, investment options and grant rules, so compare before opening one.
How big DAFs have become
The Annual DAF Report is now produced independently by the Donor Advised Fund Research Collaborative, after the National Philanthropic Trust compiled the data for nearly two decades. Using IRS Form 990 Schedule D data for fiscal year 2024 (in an updated spring 2026 analysis), it found:
| Measure (FY2024) | Value | Change from prior year |
|---|---|---|
| Number of accounts | 3.59 million | Record high |
| Contributions into DAFs | $90.57 billion | +38.6% |
| Grants out to charities | $64.60 billion | +17.9% |
| Total assets | $327.87 billion | +27.9% |
| Payout rate | 25.2% | +1.4 points |
| Average account size | $91,300 | +8.0% |
For scale, total US giving from all sources in 2025 was an estimated $617.2 billion (see our charitable giving statistics).
DAF vs. direct giving, side by side
| Donor-advised fund | Giving directly to charities | |
|---|---|---|
| When you get the deduction | The year you contribute to the DAF (if you itemize) | The year you give each gift |
| When charities get money | Whenever you recommend grants, which could be years later | Immediately |
| Giving appreciated stock | Easy: most sponsors accept stock and handle the sale | Possible, but many small charities can't accept stock |
| Paperwork | One receipt per contribution to the DAF | A receipt from every charity |
| Costs | Administrative and investment fees vary by sponsor | None beyond the gift |
| Anonymity | Grants can often be made anonymously | Charity usually knows who you are |
| New non-itemizer deduction (from 2026) | DAF contributions don't qualify | Cash gifts to eligible charities can qualify |
| IRA qualified charitable distributions | QCDs can't go to a DAF | QCDs can go directly to eligible charities |
The non-itemizer rule comes from the IRS summary of 2025 tax law changes. The QCD rule is in IRS Publication 526.
Who a DAF tends to suit
- "Bunchers." People who itemize every few years by lumping several years of giving into one tax year, then grant it out steadily. A DAF lets charities keep getting regular support while the deduction lands in one year.
- People with appreciated investments. Giving stock you've held more than a year to a public charity, including a DAF sponsor, generally lets you deduct fair market value instead of selling and paying capital gains tax first (see Publication 526 for limits).
- A windfall year. A bonus, business sale or big capital gain can make a large deduction worth more in that year.
- Families teaching giving. A shared account can be a way to decide on grants together. Our guide to teaching kids generosity has lighter-weight ideas too.
When giving directly is simpler
- You take the standard deduction and give cash. Starting in 2026, cash gifts straight to eligible charities can count toward the new deduction of up to $1,000 ($2,000 joint), and DAF contributions can't (IRS).
- You're 70½ or older and want to give from an IRA. A QCD goes straight to the charity.
- You give modest amounts to a few local causes. A fund adds fees and a layer of admin you don't need.
- The need is urgent, like disaster relief or a food bank's winter shortfall. Money parked in a fund isn't feeding anyone yet.
A fair critique to keep in mind: DAF money is committed to charity, but there's no federal minimum payout rule for individual accounts the way there is for private foundations. The aggregate payout rate of 25.2% is healthy, but averages hide accounts that sit for years. If you open one, give yourself a grantmaking schedule.
If you do open one: a short checklist
- Compare sponsors on minimum opening gift, annual fees, investment choices and grant minimums.
- Check the sponsor itself like any charity: see our guide on how to vet a charity.
- Fund it with your most tax-efficient asset, often long-held appreciated stock, after talking with a tax professional.
- Keep the sponsor's written acknowledgment for your tax records.
- Put grant dates on the calendar. GivingTuesday and year-end are natural anchors (see GivingTuesday).
- Don't use it for personal benefits. Grants shouldn't pay for event tickets, dinners or pledges that benefit you.
This page is general information, not tax, legal or investment advice. Rules change and individual situations differ, so check with a qualified tax professional before making large gifts.
Frequently asked questions
Can I get my money back from a donor-advised fund?
No. A contribution to a DAF is an irrevocable gift to the sponsoring charity, which takes legal control of the assets. You keep only the right to recommend grants.
Do DAF contributions count for the new 2026 non-itemizer deduction?
No. The IRS says donations to donor-advised funds and supporting organizations don't qualify for the up-to-$1,000 ($2,000 joint) deduction for people who don't itemize.
How much do DAFs give out each year?
In fiscal year 2024, DAFs granted $64.60 billion to charities, an aggregate payout rate of 25.2%, according to the DAF Research Collaborative.
Can I make a qualified charitable distribution from my IRA to a DAF?
No. QCDs must go to an eligible charity directly; donor-advised funds are excluded.
Is a DAF the same as a private foundation?
No. A DAF is an account at a public charity that you advise; a private foundation is its own legal entity with its own board, filings (Form 990-PF) and rules. DAFs are usually cheaper and simpler to run.
Sources
- IRS — Donor-advised funds
- Donor Advised Fund Research Collaborative — The Annual DAF Report (FY2024 data, updated spring 2026)
- Johnson Center for Philanthropy — The Annual DAF Report 2025
- IRS — One Big Beautiful Bill provisions (Working Families Tax Cuts)
- IRS — Publication 526, Charitable Contributions
- IRS — Form 990 series: which forms do exempt organizations file?