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titleWhat's the difference between a Donor Advised Fund (DAF) and an IRA/Qualified Charitable Donation (QCD) donation?

A Donor-Advised Fund (DAF) and an IRA/Qualified Charitable Distribution (QCD) are similar in that both are ways for donors to contribute to charity, but they are not the same. Here’s how they differ:

Donor-Advised Fund (DAF):

  • A DAF is a charitable giving account set up by the donor at a financial institution, where they can make contributions and then recommend grants to qualifying charities over time.

  • The donor funds the DAF with cash, stocks, or other assets, and can recommend grants to any charity in good standing with the IRS.

  • Donors can use the DAF for multiple charitable gifts over time, and contributions to the DAF are tax-deductible at the time the money is contributed.

IRA/Qualified Charitable Distribution (QCD):

  • A QCD allows IRA account holders (age 70½ or older) to donate directly from their IRA to a qualifying charity, up to a certain limit, while fulfilling their Required Minimum Distribution (RMD) requirement.

  • The amount donated is excluded from taxable income, providing a tax benefit, but it can only be a direct transfer from the IRA to the charity.

  • QCDs cannot be made to a DAF or other donor-advised accounts—the donation must go directly to the charity.

Key Differences:

  • DAF is a donor-controlled fund where they can recommend grants over time, while QCD is a direct donation from an IRA to a charity that meets IRS requirements for RMDs.

  • A QCD offers tax benefits specifically for IRA holders, while DAF donations offer flexibility for future charitable giving.


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titleWhat is an IRA/Qualified Charitable Donation (QCD) donation?

An IRA/Qualified Charitable Distribution (QCD) is a direct transfer of funds from an IRA (Individual Retirement Account) to a qualified charity, like [Company Name]. This type of donation has special benefits:

  • The donor can avoid paying taxes on the amount donated.

  • The donation counts towards their Required Minimum Distribution (RMD), which is the amount they must withdraw from their IRA once they reach a certain age.

  • QCD donations must be made directly from the IRA to the charity. The donor cannot receive the funds first, and then donate them.

This is a great way for eligible donors (typically 70½ years or older) to contribute to charity while reducing their taxable income!


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titleA donor asked to give through a Donor Advised Fund (DAF). What information do I need to provide them?




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