Donor-advised funds

Charitable giving

A donor-advised fund (DAF) offers a simple, flexible and effective way to facilitate your charitable giving, providing both immediate benefits and long-term impact.

What is a donor-advised fund?


A DAF is a convenient charitable giving vehicle that allows you and your family to donate money, claim tax benefits, and recommend grants to your favourite charities at your own pace.

The DAF is established under an umbrella charity, the National Philanthropic Trust UK (NPT UK), which administers the fund on behalf of the donor. This makes it a hassle-free alternative to creating a private foundation, as it reduces administrative responsibilities and costs, making it easier to focus on the joy of giving.

How does a DAF work?

1. Create: Once a donor application is completed, a DAF can be opened in as little as 48 hours, although the underlying investment account will take longer. Donors simply complete a DAF application with NPT UK and confirm any family members who can make donations.

2. Give: Donors make an irrevocable contribution of assets to the DAF by donating cash or assets, receiving UK tax relief for each contribution.

3. Grow: Donors can recommend that their contributions are managed and invested by an investment manager of their choice, and the assets in the DAF grow tax-free.

4. Grant: Donors recommend grants to their favourite charities worldwide, at any time.1

Donor-advised fund (DAF) graphic and how it works

Benefits of establishing a DAF

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Tax efficiency

Receive immediate tax relief on all contributions. UK tax payers receive income tax relief and/or capital gains tax relief.

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Flexibility

Give to any cause, anywhere in the world, at any time.1 You can also contribute a wide range of assets to your DAF including cash, shares, property and alternative investments.

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Convenience

Can be established within days and requires minimal administration. You can also contribute funds immediately while deciding where and when to donate later.

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Privacy

You can choose to make your grants anonymously from your DAF or use your DAF publicly for recognition.

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Family orientated

A DAF provides the opportunity to make grants as a family, with nominated family members able to run your DAF.

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Supports estate planning

Name successors to manage the DAF beyond your lifetime or choose to make legacy gifts to charities. You can name a DAF as a charitable beneficiary in your will.

The information provided should not be mistaken for formal planning advice; it is imperative that you seek relevant advice for your own personal circumstances. RBC do not provide tax or legal advice and we would recommend that you seek appropriate advice in these areas. The investments, and any income from them, can fall and you may get back less than you invested.

1 Any global charities you give to need to meet the guidance of the UK Charity Commission.

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