A donor-advised fund, or DAF, is like a charitable investment account for the sole purpose of supporting charitable organizations you care about. When you contribute cash, securities, or other assets to a donor-advised fund at a public charity, like Fidelity Charitable, you are generally eligible to take an immediate tax deduction. Then those funds can be invested for tax-free growth, and you can recommend grants to any eligible IRS-qualified public charity.

You want your charitable donations to be as effective as possible when you give. Donor-advised funds are the fastest-growing charitable giving vehicle in the United States because they are one of the easiest and most tax-advantageous ways to give to charity. Let’s take an in-depth look at how a DAF works.

How a donor-advised fund works

GIVE

Make a tax-deductible donation

Establish a Giving Account and then donate cash, stocks, or non-publicly traded assets such as private business interests, cryptocurrency, and private company stock to be eligible for an immediate tax deduction. A contribution to a donor-advised fund is an irrevocable commitment to charity; the funds cannot be returned to the donor or any other individual or used for any purpose other than grantmaking to charities.

GROW

Grow your donation, tax-free

While you're deciding which charities to support, your donation can potentially grow, making available even more money for giving. Most sponsoring organizations have a variety of investment options from which you can recommend an investment strategy for your charitable dollars.

GRANT

Support charities you love, now or over time

You can support virtually any IRS-qualified public charity with grant recommendations from the donor-advised fund—from your local homeless shelter to your alma mater or religious institution. The public charity sponsoring your account will conduct due diligence to ensure the funds granted go to an IRS-qualified public charity and are used for charitable purposes. A Fidelity Charitable Giving Account is a great way to support charities you love at a pace that is comfortable for you.