As Americans worried about how they would feed their families, care for their children, and stay healthy in the face of Covid-19, they found an important source of support – their neighbors.
In cities and towns across the country, those who have means have stepped up to help their neighbors in need in the face of the Covid-19 pandemic.
And they have used a popular – and widely misunderstood – tool to help: donor-advised funds (DAFs).
Donor-advised funds are charitable giving vehicles that make it easy for individuals and families to contribute to charity. Once donors contribute cash, stock, or other property into a DAF, they are legally required to give the money to support registered nonprofits. In return, they receive a tax deduction and receive advisory privileges on how and when the funds invested in a DAF are granted to charities.