What is a donor-advised fund?

A simple, flexible and tax-efficient way to give to your favorite charities.

A donor-advised fund 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 virtually any IRS-qualified public charity.

When you give, you want your charitable donations to be as effective as possible. 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 donor-advised fund works.

How a donor-advised fund works

Make a tax-deductible donation

Donate cash, stocks, mutual funds, or non-publicly traded assets like private business interests and qualify for a tax deduction.

Grow your donation, tax-free

While you’re deciding which charities to support, your irrevocable donation is invested based on your recommendation, so it has the potential to grow, tax-free, while you’re deciding which charities to support.

Support charities you love, now or over time

You can recommend grants online or on the go with the Fidelity Charitable iPhone app and support virtually any IRS-qualified public charity with the money you’ve put into the Giving Account.

A smarter way to give

What if you could support all your favorite charities with just one donation? That's the power of a donor-advised fund. Ours is called the Giving Account.

A wide range of acceptable assets

Contributing assets other than cash is simple with a donor-advised fund; other types of charities may not be able to accept non-cash donations. See what you can donate

Assets generally accepted include

Tax benefits

As soon as you make a donation, you are eligible for an immediate tax deduction, just as you would by donating to another public charity. Your tax deduction may depend on the type of donation.

  • Cash donation - If you donate cash, via check or wire transfer, you're generally eligible for an income tax deduction of up to 60% of your adjusted gross income.
  • Long-term appreciated assets - Donating long-term appreciated securities potentially allows you to maximize capital gains tax advantages, which could help you reduce taxes and ultimately give more to charity. If you have long-term appreciated assets, such as stocks, bonds or real estate, you have an opportunity to further maximize your deduction. By donating these types of assets directly to charity, you generally won't have to pay capital gains, and you can take an income tax deduction in the amount of the full fair-market value, up to 30% of your adjusted gross income (AGI).

Other advantages of a donor-advised fund

Continue to enjoy benefits beyond the basics.

  • Simplified recordkeeping - it's much easier to keep track of one tax receipt
  • Support your legacy planning
  • Authorize your financial advisor to help you take full advantage of your donor-advised fund
  • Name your donor-advised account, such as the Robinson Family Fund

DAF quiz illustration

QUIZ: Is a donor-advised fund right for you?

Just answer a few questions, like how long you hope to contribute, the amounts, and your risk tolerance.

How Fidelity Charitable can help

Since 1991, we have been helping donors like you support their favorite charities in smarter ways. We can help you explore the different charitable vehicles available and explain how you can complement and maximize your current giving strategy with a donor-advised fund. Join over 200,000 donors who choose Fidelity Charitable to make their giving simple and more effective.

Ready to get started?

Establishing your Giving Account is easy and only takes 5 minutes.

All you need is your Social Security number and, when you're ready, a $5,000 minimum donation.

Or call us at 1-800-262-6039