Donor-Advised Funds 101

Posted on December 21, 2020

By Cathy Shouse

In 2018, contributions to Donor-Advised Funds (DAF’s) comprised 12.7% of all individual charitable giving in the U.S., which totaled $292.09 billion. Due to a recent uptick of DAFs coming into the Library Foundation and their overall popularity, the Library Foundation board met with Central Indiana Community Foundation (CICF) to learn more.

“CICF has eliminated its minimum to start a donor-advised fund,” said Mary Stanley, a member of the Library Foundation’s Planned Giving Advisory Committee and Director of Gift Giving and Legal Affairs for CICF. “DAFs allow donors to become more effective philanthropists and to better time donations to take advantage of charitable income tax benefits.”  

What you need to know:
A charitable sponsor is simply a tax-exempt charitable organization that manages the DAF. 
In setting up a DAF, a donor establishes and funds an account through irrevocable, tax-deductible contributions to the charitable sponsor. Additional funds may be contributed later.
The distributed funds, called grants, can be made to one or more charitable organizations of the donor’s choice and on the donor’s timetable.
The charitable sponsor ensures the DAF and all grants are administered in compliance with all regulations.
Possible donations to DAF’s: cash, publicly traded stocks, closely held business interests, real estate, cryptocurrency, and certain tangible personal property, such as art and coin collections. 

The Library Foundation can accept gifts made through a DAF. If you have questions, call us at 317-275-4700.