IRC §170(f)(18)

Donor Advised Fund (DAF)

A Donor Advised Fund (DAF) is a charitable account you fund in one year and distribute from over time. You get the full tax deduction the year you contribute — not the year the money reaches the charity. This is the key mechanic: deduction now, distribution later.

Two things to understand before relying on the savings estimate. First, once money enters a DAF it is irrevocable — it legally belongs to the fund sponsor and must eventually go to a qualifying charity. You cannot take it back for personal use.

Second, the deduction only produces real tax savings if you itemize, meaning your total deductions must exceed $32,200 MFJ / $16,100 single in 2026. If you are below that threshold in the contribution year, the DAF contribution does not lower your taxes at all. Bunching — contributing multiple years of planned giving at once — is how most people clear the threshold.

Who this may apply to

Plan to give $5,000+ to charity
Want to time deductions strategically
Have appreciated assets to contribute

Strategy connections

Works well with

Charitable Deduction Optimization: Can serve as the vehicle for a multi-year bunching plan.
Income Timing / Deferral: Contributions can be concentrated in a year when an itemized deduction is expected to be useful.

What could block this

The contribution is not irrevocably dedicated to charity
The taxpayer will not itemize or cannot substantiate the contribution
The donor needs direct control or personal use of the contributed assets

Important considerations

Once contributed to a DAF, the funds are irrevocable — you cannot take the money back. You can only grant it to qualified charities
Some DAF sponsors have minimum grant amounts ($50-$500) — understand the rules before contributing

Professional support

Financial Advisor + Tax CPA

Will help establish the DAF, contribute appreciated assets, and plan distribution timing.

Timing

Contributions must be made to the DAF by December 31 to count for that tax year. The DAF sponsor handles grant timing — you can distribute to charities in future years.

Official sources

Reviewed 2026-07-24