For high-income individuals, donor-advised funds (DAFs) are becoming an increasingly popular giving and tax planning strategy. Indeed, DAFs have grown considerably in recent years. According to a report from National Philanthropic Trust, grants to DAFs rose by 27% between 2019 and 2020, the highest rate of growth in over a decade.
Yet despite their recent rise in popularity, many investors are unfamiliar with DAFs and their potential benefits and drawbacks. In this article, we’re sharing what you need to know about donor-advised funds and how contributing to a DAF may help you reach your financial goals.