Giving to the charities closest to your heart used to mean doing research to vet nonprofits on your own, writing and mailing checks, and keeping records of every gift for tax purposes—a method that could feel cumbersome, slow, and burdensome. For many people, that complexity created barriers to giving. It also left donors feeling like they were spending more time on paperwork than on making a charitable impact.
Donor-Advised Funds (DAFs) have changed all of that. They streamline charitable giving by removing the stress of administration and offering an easy, effective way to organize your philanthropy. Instead of juggling receipts, tax forms, and checkbooks for each gift, you make one contribution into your DAF and then recommend grants to the organizations you love.
A DAF is one of the easiest and most flexible ways to give. It is a tool that allows you to support the causes you care about—without the administrative headaches. And because it comes with significant tax benefits, it is also a smart financial planning tool.
At the Orange County Community Foundation (OCCF), we help generous people give to the causes and organizations they care about most through Donor-Advised Funds. We do the hard work so you can sit back and enjoy the joy that comes with charitable giving. Our job is to free you from paperwork so you can focus on what matters most: your values, your vision, and your impact.
What is a Donor-Advised Fund and How Does it Work?
A DAF is like a charitable investment account, created for the purpose of supporting the nonprofits you care about. You contribute money or other assets into the fund, receive an immediate tax deduction, and then recommend grants from the fund to your favorite charities.
Here is how it works in four simple steps:
- Open your DAF – You set up a DAF with OCCF. The process is simple and only takes a few days. The minimum needed to establish a fund is $25,000.
- Make contributions – You contribute cash, stock, real estate, or other assets to the fund. OCCF liquidates your assets at no additional cost.
- Get your tax deduction – You can claim an immediate charitable tax deduction in the year you contribute to your DAF.
- Recommend grants – Over time, you recommend gifts from your fund to nonprofits that inspire you. At OCCF, this is as easy as contacting your assigned Philanthropic Advisor or logging into your online portal to recommend a grant. OCCF handles everything else, from making sure the nonprofits you choose are in good standing with the IRS, to making the grant payments. You will have only one consolidated tax statement from OCCF for your giving each year.
A DAF is highly flexible. You do not have to decide right away which charities to support. Your fund can grow over time with investment returns, and you can give when you are ready. This makes it a great option for donors who want to act on generosity today but still take their time deciding exactly how to focus their gifts.
The Tax Advantages of Giving with a DAF
One of the biggest benefits of a DAF is tax savings. When you contribute to your DAF, you can:
- Claim an immediate tax deduction – even if you have not yet chosen the nonprofits you’ll support.
- Avoid capital gains taxes – if you contribute appreciated assets like stock or real estate. Instead of selling and paying taxes, you donate directly and preserve more value for charity.
- Simplify your giving strategy – if you itemize deductions, you can “bunch” several years of donations into one larger gift to maximize tax savings in a high-income year.
A DAF also simplifies recordkeeping. Instead of chasing receipts from multiple charities, you get one tax document from OCCF.
In short, you get the financial benefits right away, while giving yourself time to plan your charitable gifts thoughtfully.
What Assets Can a DAF Accept?
A Donor-Advised Fund isn’t limited to cash. At OCCF, we help donors contribute a wide range of assets, including:
- Publicly traded stock and bonds
- Private business interests
- Real estate
By accepting these more complex assets, a DAF gives you flexibility to make the most of what you own—not just what’s in your checking account. For many entrepreneurs or families with long-term investments, this is an especially valuable tool. A DAF can unlock charitable potential from assets you may not have even considered “liquid.”
DAFs vs. Private Foundations
Some families consider starting a private foundation to manage their giving. While foundations can be a good fit for certain donors, setting one up and managing the foundation is costly, time-consuming, and requires a lot of administrative effort. A Donor-Advised Fund, on the other hand, offers many advantages. In fact, many private family foundations eventually close and open a DAF so they can leave the administration tasks to OCCF and focus on the fun part—giving!
DAFs are simpler and more cost-effective than family foundations because:
- No startup costs – Unlike private foundations, which often require legal fees and ongoing accounting and staffing costs.
- No annual filings – Foundations must file tax returns and comply with strict regulations. A DAF sponsor handles administration for you.
- Lower minimums – OCCF DAFs start at $25,000, compared to millions often needed to justify a foundation.
- Greater privacy – DAFs don’t publish annual tax returns listing your giving.
The bottom line: a DAF gives you the same joy of directing charitable dollars as a private foundation, but with a fraction of the cost and none of the headaches.
How to Recommend Grants with Your DAF
Once your fund is set up at OCCF, you will be assigned a Philanthropic Advisor. This person is your go-to for all your giving. To recommend a grant all you need to do is call or email your Advisor or use our online portal.
Through OCCF’s donor portal, you can:
- Log in to your account.
- Search for the nonprofit you’d like to support.
- Submit your grant recommendation.
- OCCF reviews the request, verifies nonprofit eligibility, and sends the grant check.
You can choose to share your name with the nonprofit—or remain anonymous. You can also set up recurring grants, making it simple to support your favorite causes on a regular schedule. This level of personalization ensures your giving reflects your values, while the OCCF team handles the behind-the-scenes logistics.
Growing Your Charitable Impact with Investment Options
Another advantage of a DAF is the ability to invest your contributions for growth. Instead of sitting idle, your fund can grow tax-free until you’re ready to give.
At OCCF, you can choose from a variety of professionally managed investment pools, based on your goals and risk tolerance. That way, your giving can stretch further to generate impact.
Setting Up a DAF with OCCF
At the Orange County Community Foundation, we’ve been helping donors create Donor-Advised Funds for more than 35 years. Setting one up is simple:
- Contact our Philanthropic Strategy team – We’ll talk through your goals and answer questions.
- Open your fund – A short agreement establishes your fund at OCCF.
- Make your first contribution – The minimum to open is $25,000.
- Start granting – You can begin recommending grants right away or take your time.
You’ll also have access to OCCF’s team of experts who can:
- Help you research nonprofits.
- Provide insights on community needs.
- Guide you on involving your family in giving.
With a DAF at OCCF, you join a community of like-minded donors who are making Orange County—and the world—a better place. You also gain peace of mind knowing your giving is stewarded by one of the nation’s most respected community foundations.
Final Thoughts
A Donor-Advised Fund is one of the most powerful and flexible tools available to modern philanthropists. It combines the joy of giving with the advantage of tax benefits, investment growth, and administrative simplicity. Whether you’re looking to streamline your charitable giving, involve your family, or leave a legacy, a DAF at OCCF can help you achieve your vision.
If you are ready to learn more, contact OCCF today. Together, we will make your giving meaningful, impactful, and lasting.
