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.
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.
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.
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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