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Donor-Advised Fund

A flexible way to set aside assets for future charitable gifts

Would you like a simple, meaningful way to separate your charitable funds from your other assets, receive an immediate income tax deduction, and recommend grants to support Indiana University and other qualified charities later, when the time is right? You can accomplish all that with a donor-advised fund (DAF).

How a donor-advised fund works

  1. Make an irrevocable contribution to the DAF using cash or other assets.
  2. Qualify for a tax deduction for your contribution (subject to limitations).
  3. Take advantage of tax-free growth potential and professional asset management.
  4. Recommend a grant to a qualified charity like the IU Foundation.

Give now <em>and</em> later

To make an even greater impact on Indiana University, consider naming the IU Foundation as the sole or partial beneficiary of your donor-advised fund.

Limitations on deductions

  • Only gift amounts that surpass 0.5% of your adjusted gross income (AGI) qualify for a deduction.
  • If you are in the top 37% tax bracket, the tax benefit of your deduction is capped at 35%.
  • The maximum deduction is generally limited to 30% of your AGI if funded with long-term appreciated property (60% if funded with cash). Any excess deduction can be carried over for up to five years.

See it in action

When Carter’s father, Paul, passed away, he received a substantial inheritance. Part of that inheritance was a retirement account, which was taxable. Although he could have taken the retirement assets over time, he took them in full. Then, to offset the tax, he made a tax-deductible contribution to a donor-advised fund.

Carter’s approach was driven by his desire to honor his father’s memory. Paul established the foundation for his successful career at IU and even met Carter’s mother while studying there.

Carter appreciates the flexibility of the DAF—he didn’t have to rush into making a gift while he was grieving just to qualify for the tax deduction. Instead, he could take the time to consider how and when to make one or many future grants, participating in meaningful philanthropy for years to come.

You choose how to give

Interested in donating more complex assets? Using a DAF can make it easier. Most donor-advised funds can accept a variety of non-cash assets, including:

Let us help

The Office of Gift Planning Services is happy to answer your questions and provide more information.

Request a confidential conversation with our team

If you’ve already made a planned or deferred gift to IU, let us know. You might qualify for Arbutus Society membership!

Learn more about the Arbutus Society