A donor-advised fund is a centralized vehicle for charitable giving that makes it easy for donors to dedicate funds to support their favorite nonprofit organization. It also provides an operationally convenient and tax-efficient method for donors to manage their charitable giving.
With a donor-advised fund, charitably inclined individuals, families, and businesses make an irrevocable gift to a public charity that sponsors a donor-advised fund program, and may take an immediate tax deduction. Donors can then recommend grants over time to IRS-qualified 501(c)(3) public charities. Donor-advised funds also allow donors to approach their charitable giving thoughtfully by involving other family members or colleagues in their philanthropic decisions. Most donor-advised funds accept donations of long-term appreciated securities and other assets, and donors can advise how the funds are invested.