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Donor-advised Fund (DAF)

Donor-advised Fund (DAF): give now, grant later

Definition

A donor-advised fund (DAF) is a charitable giving account held by a sponsoring organisation. A donor contributes money, receives the tax benefit immediately, and then recommends grants from the fund to nonprofits over time.

Grant Management
Published on
August 10, 2026
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What is a donor-advised fund?

A donor-advised fund (DAF) is a charitable account held at a sponsoring organisation, such as a community foundation or a financial institution's charitable arm. A donor puts money in, receives the charitable tax benefit at that moment, and later recommends which nonprofits should receive grants from the account.

The defining feature is the split between giving and granting. The donation is complete for tax purposes when the money enters the fund, but the decisions about where it ultimately goes can unfold over months or years.

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How is a DAF different from an endowment?

Both hold charitable money for future use, but the ownership and purpose differ. A DAF is an intermediated giving account: the donor advises, the sponsor legally controls, and funds are meant to flow out as grants. An endowment is an institution's own permanent capital, invested to fund that institution's mission indefinitely.

In short, a DAF is a way for a donor to route and time their giving; an endowment is a way for an organisation to sustain itself. One is a conduit, the other a reserve.

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Why do DAFs matter to funders?

Because they have become a major channel of charitable capital, changing how and when money reaches nonprofits. For a corporate funder or foundation, DAFs are both a giving tool they might use and a source of funds they might receive from.

They also introduce a timing dynamic: money can sit in a DAF before being granted out, which is why the flow from contribution to actual grant matters to organisations planning their funding. Understanding DAFs helps a funder read the wider giving landscape it operates in, alongside direct corporate giving.

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Managing DAF-related giving in a platform

When a funder gives through or receives from DAFs, those flows still need to be tracked, approved and reported like any other. A grant management platform records DAF-related grants within a funder's overall grantmaking, so no channel sits outside the reporting picture.

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FAQ

Frequently Asked Questions

What is a donor-advised fund?
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How is a DAF different from an endowment?
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Why do donor-advised funds matter to funders?
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When does a donor get the tax benefit with a DAF?
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Related terms

The newest terms we've added, the words teams managing grants, sponsorship, and CSR come across most often.

Grant Management

Project Grant

A project grant is funding awarded for a specific, defined piece of work, with its own objectives, timeline and budget, rather than for the general running of the organisation receiving it.

It is the most common form of grant. The funder approves a described project and expects to be told what that project achieved, which is why project grants carry heavier reporting requirements than unrestricted funding.

Grant Management

International Grantmaking

International grantmaking is awarding grants to organisations based outside the funder's own country, which adds verification, currency, language and reporting requirements that domestic grants do not carry.

The additional work is front-loaded. Establishing that a foreign organisation can be funded is harder than paying it, and the route chosen at the outset determines the obligations for years afterwards.

Grant Management

Data Residency

Data residency is the country or region where a platform physically stores the data you put into it. It is a contractual commitment, not a technical preference, and a supplier should be able to state it in writing.

For grant, sponsorship and volunteering programmes the data in question includes applicant and employee personal data, which is what moves residency out of the IT conversation and into procurement.

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