Two cousins want to support the same church. One wants the family name on the building. The other wants the grant to arrive without a name at all. They are not yet choosing a donor-advised fund or a private foundation. They are naming two different hopes for the same gift. The vehicle comes after that sentence, and it still has to be checked by someone who can sign a return.
What the latest United States figures describe
National totals are not a recommendation. They do show why the comparison keeps coming up.
The Donor-Advised Fund Research Collaborative’s updated memo for the 2025 Annual DAF Report, labeled April 2026 on the Grand Valley State University record, draws on IRS Form 990, Schedule D, for fiscal year 2024. The revised counts, which replace the first edition of that report, are: 1,512 United States sponsoring organizations, 3.59 million accounts, $90.57 billion in contributions, $64.60 billion in grants, $327.87 billion in assets, a payout rate of 25.2 percent, and an average account size of $91,300. The collaborative states that National Philanthropic Trust compiled this series for nearly two decades and that the 2025 edition is produced independently by the collaborative. The memo is the source to use, not an older PDF that still shows 1,485 sponsors.
Giving USA 2026, the report on philanthropy in the year 2025, estimates that individuals, bequests, foundations, and corporations gave $617.20 billion to United States charities, up 5.7 percent in current dollars and 3.0 percent after inflation. Bequests were $62.19 billion, up 19.7 percent in current dollars. Giving to religion was $151.58 billion, up 2.4 percent in current dollars and flat after inflation. The page consulted on October 2, 2026, does not display the day of the press release. The requested citation is Giving USA 2026: The Annual Report on Philanthropy for the Year 2025, Giving USA Foundation, researched by the Indiana University Lilly Family School of Philanthropy.
These are aggregates. They do not say what a household may deduct.
A donor-advised fund, in the words of the sources
The collaborative describes a donor-advised fund as a charitable giving account. The donor contributes to a sponsoring 501(c)(3) public charity, may claim a deduction when the gift qualifies, and may recommend grants over time. Legal control of the assets sits with the sponsor, not with the donor.
IRS Publication 526 (2025), for use in preparing 2025 returns, carries a file date of February 5, 2026, on the PDF. On contributions to donor-advised funds it states two bars this article will repeat and then stop. You cannot deduct the contribution if the sponsoring organization is a war veterans’ organization, a fraternal society, or a nonprofit cemetery company. You also cannot deduct it if you do not have a contemporaneous written acknowledgment that the sponsor has exclusive legal control over the assets. The publication says there are other circumstances in which a deduction is not allowed, and it points to Internal Revenue Code section 170(f)(18).
This article does not state an adjusted-gross-income cap, a floor for non-itemizers, or any 2026 legislative change. Those figures were not confirmed on an IRS page in the research for this draft. A tax adviser reads them for the year of the gift.
A private foundation, without a borrowed rate sheet
A private foundation is a separate charitable organization. Families often consider one when they want the name, the board, and a grantmaking life that continues after the donor who wrote the first check. Control is greater than a recommendation to a sponsor. So is the paperwork, the public reporting, and the set of excise-tax and distribution rules in the Code.
This essay does not restate a minimum payout percentage or an excise-tax rate. Those rules are year-specific and fact-specific. Quoting a round number from memory would be the sort of advice this publication refuses. Ask counsel to read the current IRS materials for private foundations before anyone compares “cost” as if it were a single fee.
Side by side, on the questions families actually ask
| Question | Donor-advised fund | Private foundation |
|---|---|---|
| Who holds legal control of the assets? | The sponsoring charity. Publication 526 requires a written acknowledgment of that exclusive legal control before a deduction is available. | The foundation, through its board. The family often sits on that board. That is a different legal relationship. Counsel describes it for the entity you would create. |
| Can the gift be anonymous? | Often yes, because the sponsor makes the grant. Ask the sponsor what the recipient will see. Do not assume every sponsor offers the same privacy. | Generally more visible. Private foundations file publicly. If the family wants its name on the work, that visibility is the point. If it does not, the filing is a cost. |
| What happens when the donor dies? | Succession depends on the sponsor’s policies for successor advisers. Read them. They are not uniform. | The board and the organizing documents decide. That is closer to family governance than to an account form. |
| What does it cost? | The sponsor’s schedule: administrative fees, investment expenses, and any minimum. This article does not quote a sponsor’s fee. | Legal formation, an annual return, investment oversight, and often staff or a foundation manager. Ask for a written estimate. Do not use a blog’s “typical” percentage. |
Faith does not pick the form
Searchers already arrive on this page with the phrase “faith based donor advised fund.” Faith is not a tax classification. It changes the questions, not the statute. A family that talks about stewardship still has to ask who may recommend a grant, whether the church will know the donor, and who decides after the first generation is gone. Those questions belong with the theology of enough and with the people who will have to live with the answer, including the spouses and heirs in the three-generation problem.
A donor-advised fund can serve a family that wants giving without building an institution. A private foundation can serve a family that wants the institution, the name, and the discipline of a board. Either one can be used carefully or carelessly. The spiritual risk is the same in both: the vehicle becomes a substitute for a conversation about what the money is for.
What changed in the sources since the first version of this essay
The first version of this comparison was published on July 13, 2026. The annual donor-advised-fund series it would have leaned on was, for years, National Philanthropic Trust’s. The collaborative’s own page now says that, starting with the 2025 edition, the report is produced independently, and that an updated memo replaces the earlier figures. Using the first-edition counts (1,485 sponsors and about $326 billion in assets in one circulating PDF) beside the April 2026 revision (1,512 sponsors and $327.87 billion) would mix two cuts of the same year. This update uses only the revision.
Giving USA’s report on 2025 giving is also newer than that July essay. The bequest figure matters for families because it is not the same statistic as Cerulli’s projection of wealth moving to heirs. A bequest in Giving USA is charitable giving by bequest, estimated at $62.19 billion in 2025. It is not a measure of what children inherit. Keeping those two numbers in separate sentences is the whole discipline.
Some families use a donor-advised fund while a founder is alive and discuss a private foundation later, or the reverse. That pattern is a design conversation, not a strategy this article endorses. The sponsor’s succession form and the foundation’s organizing documents have to be read together by counsel. A hybrid that exists only in a meeting note is not a plan.
The payout rate of 25.2 percent is the collaborative’s aggregate for fiscal year 2024. It is not a personal target, and it is not the private-foundation distribution rule. This article does not restate that rule. Readers who want the formula should use the collaborative’s memo rather than a paraphrase.
Giving season is a calendar, not an instruction
GivingTuesday lists December 1, 2026, as the United States date. Families feel pressure around that day and around the end of the calendar year. A date is not a reason to fund an account you have not discussed with a tax adviser. Publication 526 is where the IRS explains the records and the timing rules for charitable contributions on a 2025 return. This draft does not restate a December 31 cutoff in the IRS’s words, because that sentence was not extracted from the publication in this research pass. Your adviser should read the publication for the year of the gift.
Four questions before anyone opens an account
- What must stay private, and what does the family want seen?
- Who may recommend or approve a grant after the person who writes the check is gone?
- Is the family prepared for the public reporting a private foundation requires?
- Has a qualified tax adviser confirmed the deduction, the records, and the sponsor’s acknowledgment for this gift, this year, in the United States?
If the fourth answer is no, the first three are still worth having. They are not a substitute for the fourth.
Frequently asked questions
What is the difference between a donor-advised fund and a private foundation?
A donor-advised fund is an account at a sponsoring public charity. The donor may recommend grants. Legal control of the assets is with the sponsor. A private foundation is a separate charity, usually with a board the family influences more directly, and with public reporting and a different set of tax rules. This article does not rank them.
Is a gift to a donor-advised fund tax deductible?
Sometimes, for United States federal income tax, and not automatically. IRS Publication 526 (2025) says you cannot deduct a contribution to a donor-advised fund if the sponsor is a war veterans’ organization, a fraternal society, or a nonprofit cemetery company, or if you lack a contemporaneous written acknowledgment of the sponsor’s exclusive legal control. Other limits apply. A tax adviser applies them to the return.
How large are donor-advised funds in the United States?
For fiscal year 2024, the Donor-Advised Fund Research Collaborative’s April 2026 update reports 3.59 million accounts and $327.87 billion in assets at 1,512 United States sponsors, with $64.60 billion granted and a 25.2 percent payout rate. That is a national total, not a target for a household.
Should a faith-motivated family choose a donor-advised fund?
Faith does not choose the vehicle. It sharpens questions of anonymity, succession, and purpose. The legal and tax choice is made with counsel, using the year’s rules, not with a devotional preference alone.
Sources
- H. Daniel Heist and colleagues, updated analysis memo for The Annual DAF Report 2025, Donor-Advised Fund Research Collaborative, Grand Valley State University record labeled April 2026. Fiscal year 2024, IRS Form 990, Schedule D. dafresearchcollaborative.org. Memo PDF: ScholarWorks.
- Giving USA 2026: The Annual Report on Philanthropy for the Year 2025. Giving USA Foundation, researched by the Indiana University Lilly Family School of Philanthropy. givingusa.org. Consulted October 2, 2026.
- IRS Publication 526 (2025), Charitable Contributions, for 2025 returns. PDF file date February 5, 2026. irs.gov.
- GivingTuesday, United States date December 1, 2026. givingtuesday.org.