Skip to content

DAF FREQUENTLY ASKED QUESTIONS 

 

WHAT IS A DONOR-ADVISED FUND? 

A donor-advised fund (DAF) is an investment account for assets that are set aside for charity. After setting up a DAF account, you transfer assets in by making a gift to the DAF. The money will be invested while you decide which specific charities you want to support with the DAF over time.

HOW DO I CHOOSE A DAF ACCOUNT?

You will work with a DAF provider to set up an account. There are thousands of DAF providers and the one you choose will depend on a few factors including their fees, investment options, focus areas for their grants, service level, ease of use, and others. There are a few different categories of DAF providers:

  • National: these will often have lower fees or be associated with an institution where you already have investments (e.g. Fidelity Charitable, Schwab Charitable, National Philanthropic Trust)
  • Regional: these are locally based and will have in depth knowledge of and relationships with the charities in your community (e.g. Silicon Valley Community Foundation, San Francisco Foundation, Marin Community Foundation)
  • Topical: these might generally direct grants to a particular topic area (e.g. Jewish Communal Fund, Stanford DAF)

HOW DO I FUND MY DAF ACCOUNT?

Once you have established your DAF, you can fund it by transferring assets into the DAF account. When you make this contribution, you have made a charitable gift and legally relinquished control of the asset. This and subsequent transfers into the DAF are eligible for a charitable deduction.

You should talk to your advisers about how to fund your DAF in a tax-efficient way. For example, you may want to fund your DAF with appreciated assets. Many DAFs can also accept complex assets like real estate or cryptocurrency. Your adviser may have recommendations on the timing and amounts of your contributions in any given year to maximize the benefits of your DAF.

HOW DO I MAKE A GRANT FROM MY DAF TO MY CHARITIES OF CHOICE?

Once your DAF is established, you will maintain “advisory privileges” over the account. This means you can recommend what grants are made from the account.

To recommend a grant, simply contact the fund administrator and let them know you have a grant recommendation. You may even be able to do this online and track your previous gifts.

The information you will need about the charity is:

Name: Lucile Packard Foundation for Children’s Health

Tax ID: 77-0440090

Desired use of gift, if any (e.g. Children’s Fund, Oncology, Cardiology)

You should also let the charity know that you have recommended a grant and indicate the designation. This helps us match the gift to you when it comes to us from the DAF provider.

Note that grants from DAFs can only be made to qualified charities and you cannot receive any goods or services in exchange for the grant (e.g. you cannot use your DAF to purchase a seat at an event).

WHAT HAPPENS TO FUNDS REMAINING IN THE DAF WHEN I’M GONE? 

Many people pass away with significant funds remaining in their DAF. If you haven’t given your DAF provider instructions on how to use these funds, they will decide for you.

Work with your DAF provider to document:

Successor Agents: who can make grant recommendations for your DAF when you are unable?

Ultimate Beneficiary: if you pass with funds remaining in the account, what charities would you like them granted to?

As with all charitable planning, it is important to let the recipient charity know so that we can properly honor your gift!

​The Lucile Packard Foundation for Children’s Health is a tax-exempt organization and ​does not provide tax, legal, or financial advice. Any document or information provided ​to you by our staff is intended to be educational and informational. The Lucile Packard Foundation for Children’s Health strongly encourages all of our donors to seek counsel from their own legal and financial advisers.