A donor-advised fund, or DAF, is a philanthropic vehicle established at a public charity. It allows donors to make a charitable contribution, receive an immediate tax benefit, and then recommend grants from the fund over time. An easy way to think about a donor-advised fund is like a charitable savings account: a donor contributes to the fund as frequently as they like and then recommends grants to their favorite charity when they are ready. This definition provided by the National Philanthropic Trust - What is a Donor Advised Fund?
Here’s how it works!
For Projects: What you need to know
- Donor-advised gifts do not need to be reported by fiscally-sponsored projects.
- Donor-advised checks must be made out to Fractured Atlas and can be sent directly to the Fractured Atlas office for processing.
- The award letter from the fund would need to state that the funds are being donated to Fractured Atlas for the purposes of your project, listing the accurate project name we have on file. This allows us to process the donation in support of the appropriate project and serves as an acceptable major gift letter.
- If the donor requests any information from Fractured Atlas (EIN, proof of fiscal sponsorship, etc.), please send an email to [email protected] that includes the donor’s full name and address, a list of the required documents, and details about the funding opportunity. Fractured Atlas will review the funding information and will send the requested documents to you by email so you can forward them to your donor.
For Donors: What your foundation, trust, or wealth management company should know.
- Checks must be made payable to Fractured Atlas.
- The award letter should state that funds are being donated to Fractured Atlas for the purposes of the sponsored project, listing the project title that we have on file.Please check in with the project if you're unsure of what title to include.
- All checks can be mailed to Fractured Atlas at:
248 West 35th Street 10th Floor New York, NY 10001
Benefits of using a DAF
Donors can make one large tax-deductible donation and receive an immediate tax receipt. They can then recommend donations from the fund at later dates. Donors can support any IRS-qualified public charity, and the Foundation sponsoring the fund will conduct due diligence to ensure the donation will be used for charitable purposes and is an IRS-qualified public charity. In some cases, the donor can use investments to grow the fund tax-free, resulting in even more money for charities. Source: Fidelity Charitable Gift Fund
Common organizations that host donor-advised funds:
- Charitable Gift Funds (Fidelity, Bank of America, etc.)
- Community Foundations (usually for a region, faith, or employer)
- Charitable Trusts and Philanthropic Trusts (U.S. Charitable Gift Trust)