Can You Use Non-Cash Assets
For Donor-Advised Funds?

Source: Jakraphong Pongpotganatam from Getty Images 

Unlike other charity structures, a donor-advised fund (DAF) gives you the choice to make a contribution in cash or other assets. While DAFs offer a simple path to donate to your favorite charity, the asset type you choose will affect the tax benefits you receive and the overall impact of your donation. 

What’s Considered A Non-Cash Contribution?  

A non-cash contribution refers to any type of asset that isn’t cash. Non-cash assets are common, making up 64% of contributions in 2024 alone. After you donate, the organization that manages your DAF will sell these assets, with all the proceeds going directly to your chosen charity. 

Some examples of non-cash contributions include:  

• Real estate 

• Publicly-owned securities  

• Restricted stocks  

• Cryptocurrency  

• Life insurance  

• Fine art 

• Collectible items  

Advantages Of Donating Non-Cash Assets To A DAF 

There are many benefits donors could have by choosing non-cash charitable contributions for their DAF:  

Avoid Capital Gains Taxes 

Any assets you put into your account won’t be subject to capital gains taxes. This lets you donate the full market value without worrying about additional fees. In fact, some donors end up contributing even more than they initially planned due to their assets appreciating over time.  

Easier Time Liquidating Assets 

The best part of opening a donor-advised fund is how hands-off the process is for donors.  

For example, say you contribute $15,000 in stocks. In this case, the organization that manages the DAF will handle the transfer and sale of your stocks and use that money for the charities you choose. This streamlined approach gives you more time to plan your giving strategy without dealing with the paperwork that comes with selling assets.   

More Flexibility, Greater Impact  

Once you establish a DAF, it lasts for life. Additionally, unlike private charities, you’re not legally required to donate yearly. This means you could hold your assets in this account for longer before deciding where you want to direct your funds. With more flexibility and tax-free growth, your contributions can grow substantially over time, allowing you to give more to the causes you care about. 

Starting A Donor-Advised Fund?  

Non-cash DAF contributions have distinct advantages that could help you make a lasting impact with your donations. If you’re thinking of starting a donor-advised fund and supporting your community, LI cares here to help you every step of the way. Contact us at 631-582-FOOD (3663) to learn more.