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 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:
The Edward Jones Charitable Gift Fund is a donor-advised fund offered by Edward Jones in conjunction with the Renaissance Charitable Foundation Inc. (Foundation), which manages and administers the Edward Jones Charitable Gift Fund. Edward Jones Charitable Gift Fund offers donors the opportunity to make tax deductible, irrevocable charitable contributions to an individual DAF while retaining certain advisory privileges over the charitable purposes for which those contributions are ultimately used.
The minimum initial contribution to the Edward Jones Charitable Gift Fund is $10,000. As a donor, when you contribute cash or securities to a DAF, you’ll receive an immediate tax deduction. Any growth to the assets you contribute is 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 Charitable Gift Fund invests in actively managed mutual funds, passively managed ETFs and open−end index mutual funds from most major asset classes. Mutual funds and ETFs may also invest in additional asset classes, such as real estate investment trusts (REITs), natural resources, and emerging markets. The investments are managed according to the portfolio objectives you set with your financial advisor.
As outlined above, DAFs have several key benefits, but there are important trade-offs to consider, too:
When choosing between a foundation and a donor advised fund, a few of the main considerations are administrative burden, cost, flexibility, and annual tax deduction limits.
Foundation | DAF | |
Primary benefit | High level of control and flexibility | Current year income tax deduction |
Suggested minimum donation amount2 | $1,000,000 | $ 10,000 3 |
Estimated set up cost4 | $10,000+ | None |
Ongoing cost (as percent of assets) | 7%5 | 1%-1.5% |
Excise tax | 1.39% of net investment income | 0% |
Required distributions | 5% of net asset value annually | None |
Tax deduction limits | 30% of adjusted gross income for cash; 20% for long-term, appreciated securities | 60% of adjusted gross income for cash; 30% for long-term, appreciate securities |
Ongoing flexibility and control of: investments, granting, changing beneficiaries | High | Medium |
Ongoing administrative burden – including tax filing, audits, and compliance | High | Low |
Option to support charities anonymously | No | Yes |
2) The suggested amount is a good starting pointing for comparing giving options, but individual circumstances may require more or less than this amount.
3) Represents Edward Jones minimum. Other firms may have differ.
4) Estimated set up costs are for comparative purposes. Actual costs will vary based the size and complexity of charitable giving vehicle being established
5) Represents the median expense ratio of the largest 10,000 Foundations - Boris, E.T., Renz L., Barve A., Hager M., & Hobor G. (2006). Foundation Expenses & Compensation: How Operating Characteristics Influence Spending. Urban Institute, Foundation Center, & GuideStar
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:
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.
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.
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.
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.