Donor Advised Funds
Chapters in this video
- 0:00 Clara's startup windfall scenario
- 1:17 The four-step DAF mechanics
- 2:10 Irrevocable and advisory: the exam trap
- 2:45 Cash contributions and the 60% AGI ceiling
- 3:08 Appreciated securities and double tax benefit magic
- 3:57 DAF versus private foundation: startup and admin costs
- 4:44 Deduction limits side by side: the double memory aid
- 5:24 Zero minimum distribution for DAFs, 5% forced payout for foundations
- 6:20 The 1.39% excise tax knockout blow
- 6:47 Rapid-fire exam recap: irrevocability, privacy, bunching strategy
What this video covers
- Why a donor advised fund (DAF) contribution is irrevocable and what that means for the donor's legal rights
- The four-step sequence of DAF operation: contribution, immediate tax deduction, tax-free growth, then recommended grants
- The double tax benefit of donating appreciated securities: zero capital gains tax plus fair market value (FMV) deduction up to 30% of adjusted gross income (AGI)
- The AGI deduction ceilings for DAFs (60% cash, 30% appreciated) versus private foundations (30% cash, 20% appreciated), and the "DAF equals double" memory aid
- The 1.39% excise tax on net investment income that applies to private foundations but not DAFs
- The bunching strategy: contributing multiple years of charitable gifts in one windfall year to exceed the standard deduction, then recommending grants over time
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete Series 65 course also includes adaptive practice questions and spaced-repetition flashcards, free through December 31, 2026.