Granting Guidelines for Donor Advised Funds

Understand how donor advised funds can – and cannot – be used to support the charitable causes important to you.

Donor advised funds (DAFs) are a powerful and efficient tool for individuals looking to make a meaningful impact with their philanthropy. However, it's essential to understand the guidelines and regulations governing DAFs to ensure that grants are used appropriately and effectively.

DAFs are accounts within a tax-exempt 501(c)(3) public charity, making them subject to IRS regulations under the Pension Protection Act, the Internal Revenue Code(IRC), and the US Office of Foreign Assets Control (OFAC). DAF programs may also implement their own policies to ensure ethical and effective grantmaking. Federal penalty excise taxes can be imposed for improper use of DAFs, affecting the sponsoring DAF organization, donors and financial advisors.

Current Laws and Raymond James Charitable Policies

Law/Rationale	Current RJ Charitable Policies
IRC § 4966 – The purpose of a grant must advance the public good, as donors receive a charitable tax deduction for their contributions to a donor advised fund. A grant cannot be made that would not be 100% tax deductible.	Grants must be made to US-based public charities that are registered as a 501(c)(3) or are government entities or religious organizations; they must be in good standing with the IRS. Grants cannot be made to private non-operating foundations or other types of charitable organizations that are not considered 501(c)(3), as the tax treatment for these organizations are different.
IRC § 4967, Pension Protection Act (Pub. L. 109-280) – A grant cannot result in more than incidental benefits for the donor or their family. A grant cannot be made that would not be 100% tax deductible.	Grants cannot be made that would not otherwise be 100% tax deductible or that would result in more than incidental benefit, including uses such as paying for dues or membership fees; purchasing tickets to a benefit or other event; paying the donor for time or services provided; the purchase of goods at charitable auctions; or supporting a scholarship for which the donor controls the selection process.
IRC § 4967 (Interpretation) – Funds contributed to a DAF are legally owned by Raymond James Charitable and therefore cannot satisfy a personal commitment made by an individual to support a charity.	Grants may be used to satisfy a non-legally binding pledge or commitment, but cannot be used to satisfy an enforceable, binding pledge or financial obligation.
US OFAC – Grants must comply with OFAC regulations, which prohibit all dealings with blocked parties and embargoed countries.	Grants may not be issued to parties that are blocked or that reside in an embargoed country. Raymond James Charitable only allows grants to be made to US-based charities.

Examples of grants that can and cannot be recommended to an eligible charity

Common grant purposes	Examples of grants that CAN be recommended	Examples of grants that CANNOT be recommended
Events	Support for charitable events that are designated 100% tax-deductible by the charity receiving the grant Support for charitable events if all associated benefits are waived by the donor Tickets to or tables at events that the donor or their family is not attending (thereby not receiving a benefit)	Paying for a sponsorship at an event where the donor plans to accept associated benefits Paying for an auction item at an event Paying for tickets to events that the donor or their family is attending, even if the donor pays the non-tax-deductible portion separately
Missions / individual support	Grants that generally sponsor missionary or other religious work Support for the fundraising efforts of an individual in an athletic event/race/run/walk Support for a project led by an individual that does not directly pay that individual’s salary	Grants to benefit a specific individual(s) Support for the fundraising efforts of the donor, such as a race/run/walk, in which the donor has made a fundraising commitment, unless the commitment has been satisfied in full Grants to pay a specific person’s salary
Memberships	Memberships to religious organizations that provide only intangible benefits (i.e. tithing) Other annual memberships that provide only incidental benefits as defined by the IRS and are 100% deductible as stated by the charity receiving the grant	Paying for memberships or dues owed, where the donor has not waived all benefits
Pledges	Non-binding pledges or other expressions of intention by the donor	Legally binding pledges or other financial commitments that are enforceable by law to the donor
Scholarships	Grants to scholarships as long as the donor does not have a majority or deciding vote on the scholarship recipients	Grants to scholarships where the donor has the majority or deciding vote on the scholarship recipients Grants to scholarships where the donor or related party of the donor is a potential recipient
Lobbying, political contributions	Grants to eligible charities that advocate on issues of public concern	Grants to support a political campaign to any candidate for public office Grants to organizations that conduct activities on a specific piece of proposed legislation

Familiarizing yourself with the guidelines for granting from a DAF is crucial for ensuring that your charitable contributions are used in compliance with regulations.

To learn more about the current DAF guidelines, we encourage you to review the IRS guide on donor advised funds.

If you have questions about a specific grant request, contact our team.

Raymond James Charitable is the brand name for the Raymond James Charitable Endowment Fund, an independent non-profit organization with a donor advised fund program. © 2025 Raymond James Charitable Endowment Fund is an independent non-profit organization that has entered into a services agreement with Raymond James Trust N.A., a subsidiary of Raymond James Financial Services, Inc.

Investment products are: not deposits, not FDIC/NCUA insured, not insured by any government agency, not bank guaranteed, subject to risk and may lose value.© 2025 Raymond James & Associates, Inc., member New York Stock Exchange/SIPC, and © 2025 Raymond James Financial Services, Inc., member FINRA/SIPC, are subsidiaries of Raymond James Financial, Inc.

Raymond James Charitable does not offer legal or tax advice. Donors are urged to consult their attorneys, accountants or tax advisors with respect to questions relating to the deductibility of various types of contributions to Raymond James Charitable for federal and state tax purposes.

Raymond James Charitable is the brand name for the Raymond James Charitable Endowment Fund, an independent non-profit organization with a donor advised fund program. Raymond James Charitable has entered into a service agreement with Raymond James Trust, N.A.,a subsidiary of Raymond James Financial, Inc. © 2025 Raymond James Charitable Endowment Fund. All rights reserved. Raymond James and Raymond James Charitable Endowment Fund are trademarks of Raymond James Financial, Inc., and are used under license.

Granting Guidelines for Donor Advised Funds

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