Fulfilling Pledges
Many people don’t realize that DAF assets aren’t owned and controlled by the donor. Rather, they’re owned by a charitable sponsor, such as Fidelity Charitable, or a community foundation. This means they cannot be used to satisfy personal pledges. Many donors will instead indicate their gift intent to a charity with a non-binding verbal agreement.
Benefits to the Donor
Because DAF contributions are tax-deductible, DAF grants cannot result in benefit to the donor. A key chain, mug, or other items of minimum value may be allowed, but larger goods or services such as meals and merchandise are prohibited. This includes using a DAF to purchase admission to charitable events like galas and golf tournaments, or toward raffle tickets or auction items. DAFs also cannot pay for membership benefits, such as to a museum or professional association, if any part of the fee is not tax-deductible.
Scholarships
DAF grants can support scholarship general funds and named scholarships, or those with specific awarding criteria. The grants cannot be made directly to individuals, and they must be awarded through a public charity. Neither the donor nor their family can have a majority or deciding vote in selecting the scholarship recipient.
Private Non-Operating Foundations
While DAFs can receive grants from private foundations, DAF grants cannot be made to private non-operating foundations. Under certain circumstances, donors can recommend grants to private operating foundations that actively run their own charitable programs.
Reimbursement and Compensation
DAFs cannot be used to reimburse expenses or provide compensation, even if the expenses were in support of a charitable purpose or event. Since DAF contributions are tax-deductible, all grants must be made to a qualified nonprofit for charitable purposes.
1 “The 2023 DAF Report,” National Philanthropic Trust, accessed June 2024, https://www.nptrust.org/reports/daf-report/
The opinions and analyses expressed in this presentation are based on Curi RMB Capital, LLC’s (“Curi RMB Capital”) research and professional experience are expressed as of the date of this presentation. Certain information expressed represents an assessment at a specific point in time and is not intended to be a forecast or guarantee of future performance, nor is it intended to speak to any future time periods. Curi RMB Capital makes no warranty or representation, express or implied, nor does Curi RMB Capital accept any liability, with respect to the information and data set forth herein, and Curi RMB Capital specifically disclaims any duty to update any of the information and data contained in this presentation. The information and data in this presentation does not constitute legal, tax, accounting, investment or other professional advice.
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