Why Now Might Be the Right Time to Contribute to Your Donor-Advised Fund
By Drake Richey
As the end of the year approaches, many individuals and families begin reviewing their finances, preparing for tax season, and thinking about how they can make a meaningful impact through charitable giving.
One powerful and flexible tool for strategic giving is the Donor-Advised Fund (DAF). Whether you’ve already established a DAF or are considering starting one, now can be a good time to see how this approach may fit within your financial plan.
What Is a Donor-Advised Fund?
A Donor-Advised Fund is a charitable investment account that allows you to make contributions, receive an immediate tax deduction, and recommend grants to your favorite nonprofits over time. It can offer simplicity, flexibility, and the potential for significant tax benefits.
4 Key Reasons to Contribute to Your DAF Before Year-End
1. Maximize Your 2025 Tax Benefits
When you contribute to a DAF, you receive a tax deduction in the year the donation is made, regardless of when you distribute the funds to charities. This makes year-end a crucial time for maximizing deductions—especially if you’ve had a high-income year or are looking to reduce your taxable income.
2. Simplify Your Charitable Giving
Instead of tracking donations across multiple organizations, a DAF lets you manage all your giving from a single account. You can support multiple causes without juggling receipts or worrying about donation deadlines for each nonprofit.
3. Donate Appreciated Assets Tax-Efficiently
Contributing long-term appreciated assets, such as publicly traded stocks, allows you to avoid capital gains tax while still receiving a deduction for the full fair market value. This strategy can help you give more—without reducing your cash reserves.
4. Time Your Grants Strategically
Even if you’re unsure about where you want to give right now, you can still contribute to your DAF before year-end to lock in the deduction. You’ll then have the flexibility to recommend grants to your chosen nonprofits at any point in the future.
Think Ahead, Give Smart
Many donors wait until the last few weeks of the year to initiate contribution, but we recommend getting a head start. Early planning can help ensure your contribution is received and processed in time for 2025 tax reporting. It may also give you clarity heading into the holiday season.
A DAF also gives you the ability to respond quickly to unexpected events like natural disasters, humanitarian needs, or emerging community efforts, so you’re always ready to give with purpose. Whether you’re looking to make a one-time contribution, establish a recurring strategy, or explore donating non-cash assets, we’re here to help. Let’s work together to align your giving goals with your broader financial plan and make your giving go further for this year and beyond.
