Donor Advised Funds (DAF)

Get a tax deduction today, give to charity tomorrow! A Donor-Advised Fund allows donors to make contributions for tax deductions in, as well as providing the opportunity to benefit multiple charities or causes that are important to the donor. Donor-Advised Funds are an excellent way to establish a legacy of giving, since they allow donors to include their family members in philanthropy.

How does it work?

The Donor-Advised Fund (DAF) is an easy-to-use option that continues to gain popularity for its flexibility in achieving philanthropic and tax reduction goals. A DAF is a segregated fund maintained by a qualified public charity which is created when a donor makes a gift of cash or assets. This gift allows the donor to receive an immediate income tax deduction, avoid the capital gains tax on appreciated assets and have the ability to make grant recommendations to charities at any time. The ability to make grant recommendations will continue for the life of the donor and then the next generation can be appointed to make the recommendations for the rest of their lives.

Who does it work for?

Donor-Advised Funds are an excellent way to establish a legacy of giving, as they allow donors to include their family members in philanthropy. A DAF may be a great solution for individuals who wish to make a large contribution to charity to offset an unusually large receipt of taxable income in a particular year, but wish to retain the ability to make grant recommendations over many years. DAFs can also be used to receive distributions from trusts like Charitable Remainder Trusts and Charitable Lead Trusts—allowing the trustee to maintain some control over the growth and charitable impact of the assets involved.

The following are a few of the many benefits of a DAF:

  • Reduced Tax Costs: Using a DAF to avoid capital gains taxes and receive an immediate income strategy can assist donors in achieving various tax reduction goals.
  • Investment Flexibility: A donor can recommend their financial advisor to manage the assets of their DAF account in a wide range of investment options.
  • Charitable Impact and Legacy: DAFs are a wonderful tool for use in establishing a legacy of giving. Heirs and loved ones can be part of the process of distributing grants to charity, and can even be named successor grant advisors to allow the DAF to last beyond a single lifetime and for generations to come.

How to Start!

Establish a Donor-Advised Fund by completing a Renaissance Charitable Gift Fund Application. On the application, the donor(s) will be asked to name their fund. Typically donors choose a name in honor of themselves, their family, a relative, a friend, or a cause that is important to them.

The donor's financial advisor may open a brokerage or mutual fund account for the donor-advised fund and work with the RCF to have donations of cash and/or securities transferred into the account. Mail the Application along with any investment account applications to the Renaissance Charitable Foundation Inc. at 8910 Purdue Rd., Suite 555, Indianapolis, IN 46268; or fax to (866) 736-4624.

Once the donation is approved by RCF, the donor (or their investment advisor, if desired) will receive further communications and instructions from a Representative of RCF. In the event a contribution is not approved, the donor (or their investment advisor, if desired) will be contacted to return the contribution.

Sample Case Stategies for Donor-Advised Funds

Below are a few examples of how Donor-Advised Funds have been used in specific financial strategies. Please contact our nationally-recognized Case Design Consultants to craft a custom solution to achieve optimal tax savings and charitable benefits 1-800-843-0050 or

Donor-Advised Fund Circular

If you'd like to continue reading about Donor-Advised Fund - including information about Donors, Contributions, Tax Considerations, Investments, and Grant Making - read our program circular>>.