The Steward's Desk · Charitable giving
One account can separate the tax decision from the giving decision. Here's what that's good for, and when it's more than you need.
Jesse Plunkett, CEPA®, CRPC®
July 12, 2026 · Meet your advisor · 
A donor-advised fund, or DAF, is a charitable account. You contribute cash or investments, take the tax deduction in the year you contribute, and then recommend grants to charities on whatever schedule you like. The contribution is irrevocable, the money can be invested while it waits, and the giving can stretch over years.
The account lives at a sponsoring organization. The big custodians run them, and so do many community foundations. You can invest the balance, so money waiting to be granted can keep growing, and every dollar of that growth is committed to charity. Sponsors also handle the receipts, which turns a shoebox of donation letters into one statement.
These accounts have stopped being a niche tool. The Annual DAF Report 2025, which covers fiscal year 2024 and is now produced by the Donor Advised Fund Research Collaborative, put total US donor-advised fund assets at $327.87 billion, up 27.9% in a single year, spread across 1,512 sponsoring organizations holding 3.59 million accounts. Grants out of those accounts reached $64.60 billion, a payout rate of 25.2%. Scale is not by itself a reason to open one. It does mean the mechanics are well worn and the sponsors are easy to compare on cost.
In practice it feels like a giving checkbook. You decide once a year, or once a decade, how much to commit to charity, and the December scramble to pick recipients before the tax year closes goes away. The choosing can happen on its own calendar, cause by cause, with no deadline attached.
Bunching means concentrating several years of charitable gifts into one tax year. Since many households now take the standard deduction, a steady yearly gift can produce no tax savings at all. Stack three years of giving into a single year, itemize that year, then take the standard deduction in the off years.
The catch with bunching alone is that your church or food bank would get a triple gift one year and silence for two. A donor-advised fund removes that problem. You make one large contribution to the fund in the bunching year, claim the deduction then, and keep granting to the same charities on the same steady schedule they have always counted on.
Your tax return sees one big year. Your charities see no change at all.
Stock you have held longer than a year can be given at its full market value. You deduct that value if you itemize, and the capital gain that built up inside the shares is never taxed to anyone. The charity receives the same dollars, and you keep the cash you would have written a check with.
A donor-advised fund makes this practical. Small charities often cannot accept stock directly, but every DAF sponsor can, and one transfer of shares can fund years of grants to as many organizations as you like. If you still want to own the stock, you can repurchase it with the cash you kept, and your cost basis resets to today's price.
| How you give | Tax effect | Often a fit when |
|---|---|---|
| Cash, directly to the charity | Deductible only in a year you itemize | Your gifts are modest and simplicity is the priority |
| Appreciated stock, directly | Full-value deduction if you itemize, and the built-in gain is never taxed | The charity can accept stock and the gift is large enough to justify the paperwork |
| Donor-advised fund | Deduct at contribution, then grant over years; stock gifts get the same treatment | You want to bunch deductions, give stock easily, or simplify your records |
When you give modest amounts in cash and take the standard deduction anyway, a DAF adds an account, an administrative fee, and another layer of paperwork without changing your tax bill by a dollar. Direct giving is not a lesser version of generosity. The fund is a tax tool, useful exactly when the tax picture calls for it.
Costs are worth naming. Sponsors charge an administrative fee on the balance, and the investments inside have expenses of their own. Neither is large in percentage terms at the major sponsors, but on a small account they can eat a noticeable share of what you intended for charity.
One more boundary. If you are past 70½ and giving from an IRA is an option, a qualified charitable distribution often beats both cash and a DAF, and a DAF cannot receive one. I wrote about how that works in Qualified charitable distributions: giving from your IRA.
You bring the causes; organizing the how is my job. A short call is the place to start.
No. Contributions are irrevocable, which is exactly why the deduction is allowed in the year you give. What you keep are advisory privileges: you recommend how the balance is invested and which charities receive grants, and sponsors follow those recommendations for any qualified public charity in nearly every case.
In the tax year your contribution reaches the fund, no matter when the grants to charities go out. The deduction only helps in a year you itemize, which is why contributions are so often paired with bunching: stack the giving into one year, deduct it, then take the standard deduction in the years between.
Yes, and it is often the best way to fund one. Publicly traded stock held longer than a year is deductible at full market value, and the gain built up inside it is never taxed. Many sponsors also accept more complicated assets, like private business interests or real estate, with extra review.
Sponsors charge an administrative fee based on the account balance, and the investments inside carry their own expenses. For larger or bunched giving, those costs are usually small next to the tax savings. For modest cash gifts they can outweigh the benefit entirely, and giving directly stays the simpler choice.