What is a Donor-Advised Fund?
- Erich Hamm, AAMS®, CTFA®
- Apr 7
- 3 min read
A Donor-Advised Fund (DAF) is a charitable investment account designed to support your giving to nonprofit organizations over time. This vehicle allows donors to contribute cash, stocks, or other assets into a DAF and receive an immediate tax deduction, while maintaining the flexibility to decide which charities to support at a later date. Because of its versatility and simplicity, a DAF has become one of the most popular methods of giving for individuals, families, and corporations.
How Does a Donor-Advised Fund Work?
Contribute: You donate assets—such as cash, stocks, or non-cash gifts—into your DAF account. This donation is eligible for an immediate tax deduction, similar to other charitable contributions.
Grow: Once your assets are in the fund, they can be invested and grow tax-free, potentially increasing the amount you can give to your favorite charities over time.
Grant: You can recommend grants to qualified charitable organizations at any time, giving you the flexibility to strategically support causes and ministries you care about.
Benefits of Using a Donor-Advised Fund
Simplified Giving: With a DAF, you have a centralized place to manage your charitable giving, making it easier to support multiple charities without having to manage numerous records.
Immediate Tax Deduction: You receive an immediate tax deduction for your contributions, regardless of when the funds are ultimately granted to charities.
Privacy and Anonymity: You have the option to give anonymously, allowing you to make an impact without public recognition if you prefer.
Flexibility and Strategic Giving: Because your contributions are held in the DAF until you recommend a grant, you can take time to decide which organizations to support, helping you align your giving with your personal values and goals.
Unique Benefits of Provision's Donor-Advised Fund
Provision’s DAF is designed with a heart for Christian stewardship and generosity, providing features that set it apart from traditional donor-advised funds:
Flexibility in Making Contributions: Provision’s DAF accommodates a wide range of assets, including cash, stocks, and non-cash gifts like real estate or business interests. This flexibility ensures you can maximize your tax benefits and give in a way that aligns with your financial situation.
Low Contribution Minimum: With a minimum contribution of just $1,000, Provision makes starting a DAF accessible for many individuals, families, and businesses who want to begin their journey of intentional generosity.
Generational Giving: Provision’s DAF allows you to extend your legacy of generosity to the next generation. You can appoint successors to your fund, ensuring that your values and commitment to giving continue even after you pass away.
Low Fees: Our DAF structure is designed to keep fees low, allowing more of your contributions to support the causes you care about. This stewardship-minded approach is core to our values.
Accessibility: Manage your giving anytime, anywhere. You can access your account online or on your mobile device, making it convenient to review balances, recommend grants, and track your charitable activities.
Non-Cash Gift Options: If you have appreciated assets or other non-cash gifts, Provision can help you donate these strategically. This option provides a unique opportunity to make a tax-efficient contribution while supporting your chosen ministries.
Personalized Fund Naming: You have the option to name your fund after a loved one, a family member, or a specific cause that inspires your giving. This personalization reflects the heart behind your generosity and helps create a meaningful legacy.
Provision’s DAF is more than a financial tool—it’s a way to impact the world for good and carry forward a legacy of generosity that aligns with your faith and values. By offering flexibility, generational impact, and tailored support for your charitable goals, Provision is committed to serving your desire to give faithfully and wisely for God’s glory and the good of others.
Editor's Note: Looking for a simplified, flexible way to give? Learn more about Provision's newly enhanced DAF today.
