Donor Advised Funds | DAF Planning for High-Net-Worth Donors | Intentional LLC

Donor Advised Fund

Contribute now.
Decide later.
Give more effectively
than you thought possible.

A Donor Advised Fund is the most flexible charitable giving tool available to high-net-worth donors. One contribution. A lifetime of strategic giving. And a tax deduction the year you fund it, not the year you give it away.

Start the conversation

The best time to fund a DAF is before the income event, not after.

Why a DAF changes the giving conversation

Most people write checks.
High-net-worth donors can
do something far better.

Cash is one of the least efficient gifts a high-net-worth individual can make. When you write a check to a charity, you are giving after-tax dollars. You get a deduction, but you have already paid capital gains on any assets you sold to generate the cash.

A Donor Advised Fund changes that entirely. By contributing appreciated securities directly to a DAF rather than selling them and donating the proceeds, you avoid the capital gains tax on the appreciation and take a deduction at full fair market value. The charity receives more. The IRS receives less. And you have the flexibility to decide exactly where the money goes over time.

For a business owner approaching a liquidity event, this matters even more. Funding a DAF before the transaction closes allows you to take a deduction against the income generated by the sale. You get the tax benefit now. You decide which causes to support after the financial and emotional intensity of the transaction has settled.

"The DAF separates two decisions that most donors conflate: when to give and where to give. Separating them produces better outcomes on both dimensions."

James Roberts, Founder, Intentional LLC

What most DAF conversations miss

The mechanics of a DAF are straightforward. The harder conversation is what the giving is actually for. A DAF funded out of obligation, or purely for tax purposes, will sit largely unused. A DAF funded because a client has found something they genuinely care about becomes one of the most meaningful parts of their financial life.

The Wealth Identity Assessment often surfaces a great deal about how a person relates to generosity. Some clients need permission to prioritize themselves before they give. Some have been giving compulsively and need help building a framework that makes their giving more intentional. Understanding those patterns changes the conversation about how to structure a DAF and how to think about deploying it over time.

Why donors choose a DAF

Six reasons the DAF is the
most used charitable vehicle
among the affluent.

01

Immediate tax deduction

You receive the charitable deduction in the year you fund the DAF, regardless of when grants are made to charities. In a high-income year, this timing flexibility is extremely valuable.

02

Avoid capital gains on appreciated assets

Contributing appreciated securities directly eliminates the capital gains tax that would result from selling first. The full fair market value is available for charity without the tax haircut.

03

No required distributions

Unlike a private foundation, a DAF has no mandatory annual distribution requirement. You can grant immediately or allow the account to grow for years before distributing.

04

Simple to establish

A DAF can be opened in days through a sponsoring organization. No legal fees, no separate tax filings, no board requirements. The administrative simplicity is one of its most underappreciated features.

05

Flexible granting

Grants can be made to any IRS-qualified public charity over time. You can support multiple organizations, change your giving priorities, and involve family members in the granting process.

06

Investment growth

Assets in a DAF can be invested and grow tax-free until granted. Over a multi-year granting horizon, this investment growth can meaningfully increase the total amount available for charity.

Keep reading

Related topics worth
understanding.

Charitable Planning

The broader conversation about giving with intention

Charitable Remainder Trusts

Convert a concentrated position into income and a lasting legacy

Foundation vs. DAF

How to choose the right structure for your philanthropic goals

Common questions

What people ask about
Donor Advised Funds.

  • A Donor Advised Fund, or DAF, is a charitable giving account sponsored by a public charity that allows donors to make an irrevocable, tax-deductible contribution and then recommend grants to qualified charities over time. The donor receives the tax deduction in the year of the contribution, even if the grants to charities happen years or decades later. DAFs can accept cash, publicly traded securities, and in some cases other assets including private company shares, real estate, and cryptocurrency.
  • The primary tax benefit of a DAF is the ability to take a charitable deduction in the year of the contribution, regardless of when the grants are actually made to charities. For donors in high-income years, such as the year of a business sale, this timing flexibility is extremely valuable. Contributing appreciated securities directly to a DAF rather than selling them first also avoids capital gains tax on the appreciation, effectively increasing the amount available for charity. The deduction is subject to AGI limitations but any excess can be carried forward for up to five years.
  • A DAF is simpler to establish, less expensive to administer, and requires no minimum distribution. A private foundation offers more control, can make grants to individuals and non-501c3 organizations in some cases, and can employ family members. DAFs are subject to the policies of the sponsoring organization, while private foundations are independently governed. For most donors, a DAF provides sufficient flexibility with significantly less administrative burden. Learn more about how to choose between a DAF and a private foundation.
  • Yes, and this is one of the most tax-efficient giving strategies available. By contributing appreciated securities directly to a DAF rather than selling them first and donating cash, the donor avoids capital gains tax on the appreciation and takes a deduction at fair market value. For a donor holding a stock with a very low cost basis, this can effectively increase the charitable benefit by 20% or more compared to donating cash of the same value. The DAF then sells the securities and the proceeds are available for granting to charities.
  • The best time to fund a DAF is in a high-income year, before a large capital gains event, or when you have appreciated assets you want to give but are not yet certain which charities you want to support. For business owners approaching a sale, funding a DAF before the transaction closes allows them to take a deduction against the income generated by the sale while deferring the decision about which charities to support until the emotional and financial dust has settled. This separation of the tax decision from the granting decision is one of the most underused features of the DAF structure. Learn more about pre-transaction planning.

Start the conversation

Give more than you thought
possible. With less tax
than you expected.

A Donor Advised Fund works best when it is part of a broader charitable and tax strategy. Schedule a conversation with James to understand how it fits into yours.

Schedule a conversation

30 minutes. No pitch. No pressure.