What Is a Donor-Advised Fund?

A plain-language walk through a simple, useful giving tool.

A donor-advised fund, or DAF, is a charitable giving account held at a public charity called a sponsor. You give cash, stock, or other assets to the fund. The sponsor receives the gift, sends you a receipt, and invests the balance. Later, you recommend grants from the fund to the churches, ministries, and charities you love. The sponsor checks each grant and sends it.

That is the whole idea. It is simple, and it has been around for decades.

The Three Moments of a DAF

It helps to think of a donor-advised fund as three separate moments that ordinary giving squeezes into one.

The gift. You move money or assets into the fund. The gift is complete the moment you make it and cannot be taken back. It is also the moment that counts for your taxes, if you itemize.
The growth. The balance sits in investment pools the sponsor offers while you pray, plan, and decide. Any growth stays inside the fund and is not taxed to you. Growth is not guaranteed; fund investments can lose value.
The grants. You recommend grants, as often or as rarely as you like, to eligible charities. Each grant is a gift from the fund, not a new deduction for you.

Separating those moments is what makes a DAF useful. You can give in the year it makes the most sense for you, then take your time deciding where it should go.

Who Is Who

The sponsor is an IRS-recognized 501(c)(3) public charity. Some are large national organizations. Some are community foundations. Some are faith-based sponsors built for Christian givers. The sponsor holds legal control of the fund, which is why your gift counts as a completed charitable gift the day you make it.

You are the donor-advisor. You open the fund under the name of your choosing, you recommend grants, and you can usually name successor donor-advisors, such as your spouse or children, to carry the giving on after you.

Kingdom Portfolios is neither of those. We are guides. We help you understand the options and walk the process with you, but we are not a sponsor, and we never receive, hold, invest, or move your charitable dollars.

Why Faith-Driven Owners Love It

For many Christian business owners, the hardest part of generosity is not the willingness. It is the rhythm. Business income comes in waves. A great year arrives, and the decisions about where to give feel rushed. A donor-advised fund lets you set generosity aside when the season is full and then give it out on purpose, with prayer, and often with your family around the table.

It also changes how you think about the money. Once it is in the fund, it is set apart. You are no longer deciding whether to give. You are deciding where. It was always God’s; now the sponsor holds it legally, and you steward it by advising. That is where the joy tends to show up.

What the Tax Rules Allow

If you itemize, federal rules generally let you deduct cash gifts to a donor-advised fund up to 60% of your adjusted gross income (AGI) in a year. Gifts of appreciated assets you have held for more than a year, such as stock, are generally deductible at fair market value up to 30% of AGI, and you do not pay capital-gains tax on the growth you give away. If you give more than the limit, the extra can usually be carried forward for up to five years.

Publicly traded stock is the simplest appreciated asset to give. Closely held stock, such as shares in your own company, is different: it usually needs a qualified appraisal, and not every sponsor will accept it. Ask your sponsor and your CPA before you plan on it.

Starting in 2026, two newer rules apply to people who itemize. Only charitable gifts above 0.5% of your AGI count toward the deduction, and filers in the top bracket have the benefit of their deductions capped at 35%. Your CPA can tell you how either rule touches you. A separate 2026 deduction for people who do not itemize does not apply to gifts to a donor-advised fund.

One honest reminder: giving always costs you more than it saves. A deduction lowers your tax by a fraction of the gift, never the whole gift. Give because you want the money to do good, and let the tax rules make that generosity go further.

What a DAF Is Not

A few things surprise people, so it is worth saying them plainly.

It is not a savings account. Money given to the fund is no longer yours and cannot come back to you.
It is not a way to pay for things that benefit you, like event tickets, school tuition, or a membership.
It cannot make grants to individuals, only to eligible charities.
It is not only for the very wealthy. Minimums vary by sponsor, and some sponsors have no minimum to open.