What is a DAF? A Quick Guide

Our valued GiveWise donors will have seen and heard us refer to their account as a “Giving Fund” – it’s like having a charitable bank account, and we may be biased, but we think it is the best way for us Canadians to do our charitable giving!

But what are the mechanisms and systems behind a GiveWise Giving Fund?

GiveWise Foundation is a Registered Canadian Charity that operates as Donor Advised Fund Sponsor or DAF Sponsor for short.

What is a DAF, you may ask?

A Donor Advised Fund (DAF) is a philanthropic vehicle that allows individuals, families, and organizations to make charitable contributions to a fund, receive an immediate tax deduction, and then recommend grants to charities from the fund over time.

The DAF is typically sponsored by a public charity or a financial institution that manages the fund on behalf of the donor. The donor is granted advisory privileges over the fund, thus the name “Donor Advised Fund”.

Common DAF Terms:

• Contribution(s)
  These are assets the Donor makes to the DAF. Donors may contribute cash, securities, or other assets. This is an irrevocable charitable donation. Donors receive an immediate tax donation receipt for the full amount of the contribution.
• Fund Management
  The contributed assets are placed into an individual donor's notional account within the DAF. The donor doesn't have direct control over the assets; instead, they have advisory privileges.
• Investment Growth
  Under the right circumstances the contributed funds can be invested, and any investment growth is tax-free within the DAF. This allows donors to give more away.
• Grant Recommendations
  Donors recommend grants to qualified charitable organizations from the funds in their DAF. The sponsoring organization reviews these recommendations to ensure they comply with Canadian Charitable Law.

What are the benefits of a DAF?

• Flexibility
  Donors can contribute to the DAF at any time and can recommend grants whenever they choose. This flexibility allows for strategic and long-term charitable giving.
• Reduction in Administrative Costs for Charities
  Charities experience a reduction in administrative burden when receiving funds through a well-run DAF
• Centralized and Simplified Giving
  Donors get to have a place that centralizes and simplifies their charitable giving into one place!

For a visual representation of how it works:
Visit our Donor Advised Fund (DAF) - How it Works page for illustrations and a short video!

DAF Sponsors

Who are DAF Sponsors?

DAF sponsors can be public charities, community foundations, financial institutions who operate a charitable foundation, or other non-profit organizations.

Examples of DAF sponsors include GiveWise, Abundance Canada, Charitable Impact, most chartered banks have a related Foundation, as well as many Community Foundations.

What do DAF Sponsors do?

• Manage and Administer the DAF
  Sponsors handle the administrative responsibilities of the DAF, including compliance with tax regulations, record-keeping, investment management, and providing tax receipts.
• Provide Investment Options
  Sponsors often provide a range of investment options for donors to choose from for the funds in their DAF.
• Review & Approve Grants at the Donors Request
  The sponsor reviews and approves grant recommendations to ensure they align with CRA guidelines and charitable purposes.