What is a donor-advised fund (DAF)?

A donor-advised fund (DAF) is a specific charitable giving account that offers significant tax advantages. On cash donations, fundholders can qualify for a federal income tax deduction of up to 60% of adjusted gross income. On other donations, fundholders can qualify for a federal income tax deduction of up to 30% of adjusted gross income. A donor has more control of their assets in a DAF. While the sponsoring organization owns the fund, the donor can recommend specific grants for charities or causes.