Donor Advised Funds (DAFs)

Do you ever write a personal check or use a credit card to make a charitable donation?

We’re entering the heart of charitable giving season, so make sure your generosity is working as efficiently as possible.

When you donate cash, you get a deduction. That’s it.

When you donate appreciated securities like stocks, mutual funds, or crypto, you get the same deduction and avoid capital gains tax on the appreciation.

One of the most powerful and efficient tools in charitable giving today is the Donor-Advised Fund (DAF). 

A DAF lets you:

• Take the full charitable deduction in the year of donation (with up to five years to carry forward any unused amount)

• Invest funds tax-free to grow your giving power

• Grant to charities over time as you identify causes that matter

• Build a family legacy around giving and pass control to future generations

The AAPL, NVDA or BTC you bought years ago that’s up 500%+?

You can donate some or all of the shares, eliminate the capital gains tax entirely, and still get the full market-value deduction all while meeting your charitable goals. 

DAFs can be particularly helpful in years where income is high or a liquidity event occurs, such as selling a business or a piece of real estate.

If you’re considering funding a DAF or making charitable donations in 2025, you generally need to itemize deductions to receive the tax benefit. Consider bunching several years of contributions into a single year to maximize the benefit. 

Beginning in 2026, standard deduction filers will be able to deduct up to $1,000 (single) or $2,000 (married filing jointly) for cash contributions made to charities. DAF contributions are excluded. This is one of several charitable giving changes included in the OBBBA.

Preserve Private Wealth is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specic securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to rst consult witha qualied nancial adviser and/or tax professional before implementing any strategy discussed herein.