Donor Advised Funds (DAFs)
Chapters in this video
- 0:00 The high-income year charitable dilemma
- 1:17 What a donor advised fund is and the sponsoring organization's role
- 1:43 Legal control versus advisory privileges: the first exam trap
- 2:19 The contribute-deduct-invest-grant timeline
- 3:32 The double tax benefit of appreciated securities
- 4:03 AGI deduction limits: 60% cash, 30% securities, and the 2026 floor
- 5:06 DAF versus private foundation: setup, burden, and privacy
- 6:09 Deduction limits compared: DAF at 60/30, foundation at 30/20
- 6:45 The zero versus 5% minimum payout trap
- 7:27 Rapid-fire exam recap
What this video covers
- Why contributions to a donor advised fund (DAF) are irrevocable and what that means for the donor's ability to reclaim assets
- The critical distinction between the sponsoring organization's legal control and the donor's advisory privileges over grants and investments
- The four-step DAF timeline: contribute, deduct, invest tax-free, then grant, and why the deduction happens at contribution not at grant
- The double tax benefit of donating eligible long-term appreciated securities: avoidance of capital gains tax plus a deduction for full fair market value
- The adjusted gross income (AGI) deduction limits: 60% for cash, 30% for eligible long-term appreciated securities, and the new 0.5% floor starting in 2026
- Why DAFs have no minimum annual payout requirement versus the roughly 5% mandatory distribution for private foundations
- The seven comparison dimensions the exam tests: setup cost, administrative burden, donor control, deduction limits, minimum payout, excise tax, and privacy
Read the full lesson, free
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