Givzey Guidance: How Do I Record a Gift from a Donor Advised Fund (DAF)?

Givzey Guidance: How Do I Record a Gift from a Donor Advised Fund (DAF)?

Question: How Do I Record a Gift from a Donor Advised Fund (DAF)?

Question: What is the proper way to record a gift from a Donor Advised Fund (DAF)? We have been setting up a constituent record for the DAF administrator, e.g. Fidelity Charitable and soft crediting the constituent who set up the DAF. I was never crazy about this way of doing it because it made reporting confusing. I'm wondering what other folks have found works best for reporting.

Answer:

You are absolutely correct in setting up a constituent record for the DAF administration company, e.g. Fidelity Charitable. It is the entity making the gift per IRS regulations. DAF gifts must be credited to the legal entity that made the gift.

The other issue here is the best way recognize the donor who set up the DAF and recommended a gift be sent to your organization. That’s why you soft credit the donor.

Recording the gift is all about IRS regulations and soft credits handle the donor recognition piece of the gift.

You should absolutely thank the donor for recommending the DAF gift to your organization, but include no tax information in that correspondence.

Gift Documentation Resources:

• CASE Global Reporting Standards, 1st edition, Copyright 2021

• FASB Statement of Financial Accounting Standards 116: Accounting for Contributions Received and Contributions Made, Copyright 2008