In looking to create a charitable vehicle, you may be considering whether to establish a private foundation or a donor-advised fund (DAF). At the most basic level, the difference between a DAF and a private foundation is the construct, or form, in which each entity is created and operated.
A difference in structure may sound like a trivial distinction, but when comparing private foundations and donor-advised funds, it turns out that form really does dictate function. Because a private foundation is a freestanding legal entity, and a donor-advised fund is an account, the two charitable vehicles offer very different levels of control, authority, and philanthropic versatility. The differences between private foundations and DAFs are highlighted on the following chart. As DAF policies and procedures vary by the sponsoring organization, the information on this chart is based on standard common practice.private-foundations-donor-advised-funds-1
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