# Donor-Advised Fund A **Donor-Advised Fund (DAF)** is a giving account held inside a sponsoring [[501(c)(3)]] public charity. A donor contributes money (or appreciated assets) to the fund, takes an **immediate tax deduction**, and then *recommends* grants to other charities over time. Legally the sponsoring charity owns the money and has final say; in practice it follows the donor's recommendations almost without exception. The DAF is the **anonymizing layer** of the philanthropic and dark-money system. ## Why the DAF Is the Privacy Engine The DAF combines three features that make it uniquely useful for routing money quietly: 1. **Immediate deduction, deferred (or invisible) giving.** The donor deducts the gift the year it enters the fund, even though the money may sit for years before being granted out — or may be granted in a way that severs the donor's name from the recipient. 2. **Donor anonymity downstream.** When a DAF makes a grant, the recipient sees the *sponsoring organization* as the donor, not the individual who recommended it. A gift "from [[DonorsTrust]]" reveals nothing about whose money it is. 3. **No payout deadline (functionally).** Unlike a private foundation, which must pay out roughly 5% of assets every year, a DAF has no enforced individual payout requirement, letting money accumulate indefinitely. The result is a tool that delivers the tax benefit of a [[501(c)(3)]] gift, beats the disclosure and payout rules of a private foundation, and erases the donor's fingerprints from the eventual grant. ## DonorsTrust and the Conservative "Dark-Money ATM" The flagship case in this KB is [[DonorsTrust]] (and its affiliate Donors Capital Fund) — a DAF sponsor explicitly built to serve conservative and libertarian donors. Because grants leave DonorsTrust under the DonorsTrust name, the ultimate funders of the recipient organizations — think tanks, [[501(c)(4)]] advocacy groups, litigation shops — are obscured. Critics call it the movement's "dark-money ATM": money goes in with a tax deduction and a charitable halo, and comes out the other side with the donor's identity stripped off. Mainstream financial DAF sponsors (the charitable arms of Fidelity, Schwab, Vanguard) are now among the largest "charities" in the United States by assets, and the same anonymizing mechanics apply to any politically active grant routed through them. ## The DAF in the Stack The DAF feeds the entity-type stack documented across the [[Tax Code Hub]]: - A donor moves money into a DAF → **immediate deduction, identity protected**. - The DAF grants to a [[501(c)(3)]] (research/education) or, where permissible, to a [[501(c)(4)]] → **money reaches advocacy, donor still hidden**. - The (c)(4) spends on issue advocacy or funds a [[Super PACs]] → **money reaches politics**. At each step disclosure weakens, and the DAF is the step that breaks the link between the donor and everything downstream. ## Significance for the KB The DAF is the reason "follow the money" so often dead-ends. It is the single most effective legal device for converting identifiable wealth into untraceable charitable and political grants. Any investigation of conservative (or progressive) funding that hits a [[DonorsTrust]]-style entity has, by design, hit a wall — the DAF is built to be that wall. ## See Also - [[DonorsTrust]] — the conservative-movement DAF sponsor - [[501(c)(3)]] — the host charity type DAFs live inside - [[Public Charity vs Private Foundation]] — DAFs beat the private-foundation payout/disclosure rules - [[501(c)(4)]] — a frequent downstream recipient - [[Dark Money]] — the broader phenomenon - [[Tax Code Hub]] — folder reader map