Donor-Advised Fund
A Donor-Advised Fund is a giving account set up through a registered charity (often called a DAF sponsor, like a community foundation, a financial institution’s charitable arm, or a dedicated DAF provider). You donate assets to the fund, get an immediate tax receipt, and then recommend grants to other registered Canadian charities over time.
Key Benefits of Donor-Advised Fund
- Immediate tax receipt for donation (even if the funds are granted later).
- No cost or complexity of setting up a private foundation.
- Invested growth can increase the impact of your giving.
- Flexible & long-term: You can spread out your giving over years or generations.
- Some DAFs allow for anonymous giving.
How it works
1. Contribute to the Fund
- Donate cash, securities, or other assets to a DAF sponsor (e.g. Charitable Impact Foundation, CanadaHelps, Vancity Community Foundation, A donor-advised program at RBC, TD, BMO, etc.).
- You get a charitable tax receipt right away for the fair market value of the donation.
2. Fund Is Invested
- The assets in the DAF can be invested and grow tax-free.
- You can typically recommend an investment strategy from options provided by the sponsor.
3. Recommend Grants
- At any time, you can recommend grants to qualified donees (i.e. Canadian registered charities).
- The sponsor legally controls the funds but almost always follows your recommendations unless they violate CRA rules.
Examples of Donor-Advised Funds in Canada
- Charitable Impact (CHIMP)
- CanadaHelps
- Vancity Community Foundation
- RBC Charitable, TD Private Giving Foundation, BMO Charitable