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What is a Donor Advised Fund?

A donor advised fund (DAF) is a charitable giving vehicle that allows donors to make a charitable contribution, receive an immediate tax benefit, and then recommend grants to charities at a later date. DAFs are typically administered by public charities or community foundations and are designed to make it easy for donors to support the causes they care about.

Here's how a DAF works: A donor contributes cash, securities, or other assets to the DAF. The donor then receives an immediate tax deduction for the contribution. The assets are then invested and managed by the DAF sponsor (the public charity or community foundation). The donor can then recommend grants to charitable organizations from the DAF at any time. The DAF sponsor is responsible for managing the assets and making the grants to charitable organizations on behalf of the donor.

One of the benefits of a DAF is that it allows donors to make a charitable contribution and receive an immediate tax deduction, but still have the flexibility to decide which charities to support at a later date. DAFs also make it easy for donors to support a wide range of charitable causes, as the DAF sponsor typically has a diverse group of charitable organizations that the donor can choose from.

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