Before You Give, Name the Question
Charitable giving often starts with a familiar name before it starts with a form. A church, school, local organization, or cause may already be in mind. The next question is what the gift is meant to do.
That question can come before the account question. “Should I use a donor-advised fund?” may be a reasonable question, but it is usually not the first thing to settle. U.S. charitable giving reached $592.50 billion in 2024, with individuals as the largest source category. A personal giving decision matters because it reflects both money and values. It can also affect the community support a donor wants to provide.[1]
The more useful first question may be, “What do I want this gift to do?” That question connects the financial side of the decision with the human side, such as a church or school you care about. It can also bring into view a local organization that helped your family, a cause your children ask about, or a charity you want to evaluate more closely before sending a larger amount.[2]
Naming the purpose does not make the tax and administrative details disappear. It gives those details a job. A giving vehicle can then be judged by whether it aligns with the timing, evidence, and relationships surrounding the gift.[2][3]
What changes when you use a donor-advised fund?
A donor-advised fund is generally a separately identified fund or account maintained by a charitable sponsoring organization. The donor may have advisory privileges over distributions or investments. The sponsoring organization remains the relevant charitable organization, which is an important distinction for how the arrangement works.[4]
In plain terms, a donor may contribute assets to the fund and later recommend grants to qualified charities. After the contribution, the sponsor has legal control, while the donor retains the ability to advise. That can be useful for people who want a single place to organize their giving, especially if several charities will receive grants over time.[3]
This distinction matters because “I gave to my donor-advised fund” is not the same practical moment as “the operating charity received a grant.” Those may happen close together, or they may be separated by time. Policy debates around donor-advised funds often focus on that gap between the tax deduction and the eventual grant to an operating charity.[5]
That timing gap is neither inherently a problem nor harmless. It is a review point. If the family’s goal is to support an organization’s current work, the grant schedule should reflect that. If the family’s goal is to set aside charitable dollars while taking more time to decide, the delay should be intentional rather than accidental.[5][6]
What question should come before the account?
A better starting point is the question behind the gift. Is the goal to support a specific organization now? Is the goal to create a repeatable giving rhythm? Is the goal to evaluate charities before making larger grants? Each answer points to a different review process.[2]
For some gifts, evidence matters most. GiveWell’s public guidance encourages donors to look for meaningful, systematic evidence of impact rather than relying solely on emotional appeal or a simple overhead ratio. That does not mean the same evidence base can judge every worthwhile gift. Local, religious, arts, and relationship-based giving may require different questions. Still, the habit is useful: ask what the gift is expected to accomplish and what would make you believe the organization can do it.[2]
For other gifts, the relationship may be central. A family may want to support the same nonprofit every year because the organization has been part of their life for decades. A donor-advised fund can help centralize the recordkeeping, but the account should not become a substitute for the relationship. The giving plan should still name who receives grants, when they receive them, and how the family will review future support.[3][6]
Where do taxes and investments enter the decision?
Tax planning often comes up because donor-advised funds can receive charitable contributions before grants are recommended. That timing can be helpful in some planning situations, but the tax mechanics should be reviewed with the rules that apply to the donor and the asset. The IRS maintains specific requirements and guidance for donor-advised funds and their sponsoring organizations.[7]
Appreciated asset giving is a common reason people consider donor-advised funds. A large national sponsor reports that many contributions to its donor-advised fund involve non-cash assets. That sponsor data does not describe every donor or every sponsoring organization. Still, it does show why people often associate donor-advised funds with stock or other assets rather than with checkbook giving alone.[8]
The investment side also needs plain language. Donor advisory privileges may include recommendations about investments inside the account, but those privileges are not the same as owning an ordinary investment account. The money has already been contributed to a charitable sponsor. That difference should be clear before someone treats the account like a personal reserve for future charitable ideas.[4][3]
What needs to be reviewed after the gift is made?
A donor-advised fund can make giving simpler, but it can also make the next step easier to postpone. Average payout rates at sponsoring organizations may not reflect what is happening in a single account. Aggregate numbers can hide variation, which is why the relevant review is often personal: Are grants being recommended in a way that matches the reason the money was set aside?[5]
Governance language matters here. Professional philanthropy guidance distinguishes donor advice from legally binding restrictions that may apply to a fund’s purpose. That distinction can matter if a donor wants a narrow use, a family role, or a continuing pattern of grants. Specific legal and tax questions should be handled with qualified counsel, but the planning question can be asked in everyday words: What are we advising, and what is actually binding?[6]
The IRS has also identified potential abuses involving arrangements promoted as donor-advised funds, including questionable charitable deductions and impermissible donor benefits. That does not mean ordinary donor-advised fund use is abusive. It means the donor should be careful when a proposed arrangement seems to blur the line between charitable giving and personal benefit.[4]
A simple annual review can help. Look at the charities that received grants. Look at any balance that remains. Look at whether the original purpose still fits. If the account was opened during a high-income year, a retirement-planning transition, or a family giving conversation, the review should connect back to the original reason.[7][5]
Start with the name of the question
The useful order is purpose, then vehicle. A donor-advised fund may help organize giving, separate the contribution date from the grant date, and handle certain assets through a sponsoring organization. It may also add a layer between the donor and the operating charity. That layer should have a reason.[4][3][8]
Before choosing the account, name the question. What should this gift do? When should the charity receive support? What evidence, relationship, or family conversation should guide future grants? Those answers make the giving vehicle easier to evaluate and easier to review.[2][6]
The clearest next step may not be opening something new. It may be writing down the intended charities, the expected timing, and the review date. From there, the donor-advised fund question becomes more practical: Does this tool serve the gift you have named?[5][7]
About the author
Ross Marino, CFP®, CeFT®, is the Founder & CEO of Dovetail Financial and creator of Human-First Financial Guidance®. He helps people nearing or living in retirement connect their lives and wealth so that financial decisions become clearer, more personal, and easier to navigate.
Notes
1. Giving USA 2025: U.S. charitable giving grew to $592.50 billion in 2024, lifted by stock market gains. Giving USA. https://givingusa.org/giving-usa-2025-u-s-charitable-giving-grew-to-592-50-billion-in-2024-lifted-by-stock-market-gains/
2. What to look for when researching charities on your own. GiveWell. https://www.givewell.org/researching-charities-on-your-own
3. What Can a Donor-Advised Fund Do for You? (A Lot). Kiplinger. March 30, 2025. https://www.kiplinger.com/retirement/donor-advised-fund-daf-can-do-a-lot-for-you
4. Donor-advised funds. Internal Revenue Service. https://www.irs.gov/charities-non-profits/charitable-organizations/donor-advised-funds
5. What are the issues with donor-advised funds? | Urban Institute. Urban Institute. https://www.urban.org/urban-wire/what-are-issues-donor-advised-funds
6. FAQ: Donor-Advised Funds. Council on Foundations. https://cof.org/content/faq-donor-advised-funds
7. Requirements for donor-advised funds. Internal Revenue Service. https://www.irs.gov/charities-non-profits/charitable-organizations/requirements-for-donor-advised-funds
8. 2026 Giving Report. Fidelity Charitable. https://www.fidelitycharitable.org/insights/2026-giving-report.html
Disclosure
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