Donor-Advised Fund

A donor-advised fund (DAF) is a charitable giving vehicle where a donor contributes assets to a sponsoring organisation, takes the tax deduction at the time of contribution, and retains advisory rights over the timing and recipients of subsequent grants to qualified charities. The sponsor handles administration, investment, and grantmaking infrastructure.

DAFs are the dominant US philanthropic vehicle by inflow and have grown significantly in Europe and Asia in recent years. Their advantages — simplicity, flexibility, anonymity, immediate tax deduction — make them attractive to families whose giving is opportunistic rather than mission-led.

DAFs sit alongside private foundations rather than replace them. For families committing under USD 5 million, DAFs are usually structurally better. Above that threshold, private foundations often win on control and durability. Many UHNW families use both vehicles: a foundation for mission-led capital, a DAF for spontaneous or anonymous giving.