Donor Advised Fund Agreement

A donor advised fund (DAF) agreement is a legal document that outlines the terms and conditions of a charitable giving account that is managed by a fund sponsor. DAFs have become increasingly popular in recent years, as they offer donors a way to give to charity while also providing tax benefits.

A DAF agreement typically outlines the following information:

1. The name of the fund sponsor: This is the organization that manages the DAF account and is responsible for accepting and distributing donations.

2. The purpose of the DAF: This section outlines the charitable purpose of the fund, such as supporting a particular cause or organization.

3. The process for making contributions: This section explains how donors can make contributions to the DAF, including any restrictions or limitations on donations.

4. The investment policy: This section outlines how the assets in the DAF will be invested, including any restrictions on investment options.

5. The distribution policy: This section outlines how the assets in the DAF will be distributed to charitable organizations, including any restrictions on the use of funds.

6. The governance of the DAF: This section outlines the governance structure of the DAF, including the roles and responsibilities of the fund sponsor and any advisory committees.

While DAF agreements are not required by law, they are an important tool for ensuring that charitable giving is done in a responsible and transparent way. By outlining the terms and conditions of the DAF, donors can ensure that their donations are going to support the causes they care about, while also receiving tax benefits for their contributions.

In addition to the legal requirements, there are also best practices for drafting a DAF agreement that can help ensure its effectiveness. These include clearly defining the charitable purpose of the fund, establishing clear guidelines for making contributions and distributing funds, and regularly reviewing and updating the agreement to ensure that it remains relevant and effective.

In conclusion, a donor advised fund agreement is a critical document for anyone interested in charitable giving. By working with a reputable fund sponsor and drafting a well-crafted agreement, donors can ensure that their contributions are making a meaningful impact on the causes they care about, while also taking advantage of valuable tax benefits.