Donor-advised funds
Donor-advised funds are a convenient and flexible way to fulfill your charitable giving goals period.

Donor-advised funds are a convenient and flexible way to fulfill your charitable giving goals period.
Learn how donor-advised funds like the Edward Jones Charitable Gift Fund can help you support the causes you care about while potentially receiving tax deductions for your contributions.
A donor-advised fund, or DAF, is a vehicle for charitable giving that lets you make an irrevocable contribution to the fund, for which you receive an immediate tax deduction.
It is operated by a sponsor or sponsoring organization that invests and manages the donated assets.
DAFs have grown in popularity amid heightened interest in charitable giving. A recent report from the Giving USA Foundation reported that charitable giving in the United States reached a record $471 billion in 2020.
The minimum initial contribution to the Edward Jones Charitable Gift Fund (PDF) is $10,000. As a donor, when you contribute cash or securities to a DAF, you’ll receive an immediate tax deduction. The assets you contribute grow tax-free.
Donors can contribute to the fund as often as they like and request that distributions be made to IRS-approved public charities of their choosing.
The Edward Jones DAF is called the Edward Jones Charitable Gift Fund (PDF). Investing in DAFs typically follows the three-step progression summarized below:
Source: Edward Jones
The purpose of this chart is to explain the donor-advised fund process. In the first step, a donor makes a contribution of cash or marketable securities to the Edward Jones Charitable Gift Fund. The money is invested based on your preferences, and any investment growth is tax-free. The donor recommends grants/distribution to charities you wish to support, when to support them and the amount you wish to give.
The main advantages of DAFs are that they offer a simple and convenient way to maximize charitable giving while receiving an upfront tax deduction.
Several other potential DAF tax-related benefits are worth noting:
This is an example of the difference between giving a stock to a DAF versus selling it for cash and how each affects capital gains tax and/or amount given to charity.
If you give the stock to a DAF | If you sell the stock for cash | |
---|---|---|
Capital gains tax1 | $0 | $18,000 |
Amount given to charity | $100,000 | $82,000 |
1 Assumes 20% capital gains tax rate and no fluctuation in value.
A DAF has several other advantages beyond the potential tax benefits listed above:
As outlined above, DAFs have several key benefits, but there are important trade-offs to consider, too:
This table explains how to contribute to a DAF along with other details about each option.
Edward Jones Charitable Gift Fund | Cash | Charitable lead or remainder trust | Private foundation | |
---|---|---|---|---|
Types of organizations you can support | IRS-approved public charities | Public charities, private foundations and individuals (not all are eligible for an income tax deduction) | IRS-approved public charities and some foundations | As long as the grant is made for charitable purposes, many different organizations and individuals |
Setup cost, maintenance and time to establish | Lower | Lower | Higher | Higher |
Potential to grow the assets | Yes | No | Yes | Yes |
Investment options | One of seven professionally managed portfolios | N/A | A broader set of investment options | A broader set of investment options |
Income tax deduction limit as a percentage of AGI | 60% for cash, 30% for appreciated securities | 100%* | Depends on the type of charity and trust | 30% for cash, 20% for appreciated securities |
Tax on investment income | 0% | N/A | Depends on the nature of the trust | 1.39% of net investment income |
Ability to donate to the charity anonymously | Yes | No | Yes | No |
*The CARES Act increased this amount from 60% to 100% through 2021. In 2022, the limit you can deduct in any calendar year will revert to 60% with a five-year carry forward. These limits may be changed by law or regulation.
Additional considerations and rules:
If you’re interested in learning more about how the Edward Jones Charitable Gift Fund can help you fulfill your charitable giving goals, reach out to an Edward Jones financial advisor for a discussion today.
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Zach Gildehaus joined Edward Jones in 2013. He is currently a senior analyst on the Client Needs Research (CNR) team where he focuses his research efforts on charitable giving and financial strategies for business owners.
Prior to CNR, he was a senior analyst in Investment Manager Research (IMR), where he spent more than six years. During his time in IMR, he covered both active and passive investment strategies across many asset classes.
This content should not be depended upon for other than broadly informational purposes. Edward Jones, its employees and financial advisors cannot provide tax or legal advice. You should consult your attorney or qualified tax advisor regarding your situation.