Charitable Remainder Trusts (CRTs) vs DAFs
Smart giving isn’t just generous—it’s strategic.
For individuals and families looking to align their values with their financial plans, giving tools like charitable remainder trusts (CRTs) and donor-advised funds (DAFs) offer meaningful ways to create lasting impact. And this all while unlocking tax benefits. But these tools are not one-size-fits-all.
Whether you’re nearing retirement, holding appreciated stock, or simply want to make your giving more intentional, understanding how a CRT compares to a modern tool like GoFundMe Giving Funds that can help you give with confidence—and clarity.
What is a charitable remainder trust (CRT)?
A CRT trust is a way to give to charity while still getting income from your assets.
So, how does a charitable remainder trust work?
- You place assets (often appreciated ones like real estate or stocks) into an irrevocable trust.
- You receive an immediate, partial, charitable tax deduction.
- The trust pays you or your chosen non-charitable beneficiaries income annually—either for life or a set number of years.
- After the term ends, the remaining assets go to one or more charities.
There are two main types of CRTs:
- CRAT (Charitable Remainder Annuity Trust): Pays you a fixed dollar amount annually.
- CRUT (Charitable Remainder Unitrust): Pays a percentage of the trust’s value, recalculated annually—so your income may grow if the assets perform well.
These trusts are powerful tools for high-net-worth people looking to create a long-term charitable legacy.
CRT financial benefits and trade-offs
Let’s break down the key CRT financial advantages—and the complexities.
Financial benefits
✅ Avoid capital gains: You won’t pay capital gains taxes on long-term appreciated assets placed into the trust.
✅ Steady income stream: You or your beneficiaries receive regular payments.
✅ Estate tax reduction: Because the donated portion exits your estate, you may reduce estate tax liabilities.
✅ Immediate tax deduction: Based on the estimated remainder value that will eventually go to charity.
Example scenario:
A 65-year-old donor with $500,000 in appreciated stock sets up a CRT. They avoid $100,000 in capital gains taxes, get a $150,000 charitable deduction, and receive $20,000 per year in income for life.
Considerations and trade-offs
❌ Complex setup: Requires legal documents and expert management.
❌ Irrevocable: Once the trust is created, you can’t change your mind.
❌ High barrier to entry: Best suited for those with $250,000+ in appreciated assets to contribute.
What is a donor-advised fund (DAF)?
A donor-advised fund (DAF) is a simple, flexible giving account that lets you donate today—and decide where to give later.
When you create a DAF through GoFundMe Giving Funds, you can:
- Donate cash and take an immediate tax deduction.
- Potentially grow your donation by investing your Giving Fund tax-free.
- Support registered charities and causes you care about.
- Manage all of your giving in one place—with a single tax receipt.
You don’t need a complex estate plan or large sum to get started. With GoFundMe Giving Funds, you can open one with as little as $5—and start giving on your terms.
If you want to learn more about donor-advised funds, read our guide on what a DAF is.
💡DAFs reduce decision fatigue. You can contribute now, take the deduction, and give with intention throughout the year.
CRT vs. DAF: Which one fits you?
Here’s a quick side-by-side to help you compare options:
| Feature | Charitable Remainder Trust (CRT) | Donor-Advised Fund (DAF) |
| Tax Deduction | Yes, based on remainder value | Yes, based on full donation |
| Income Stream | Yes (fixed or variable) | No (but fund has potential to grow if invested) |
| Complexity | High – requires legal setup | Low – simple online account |
| Cost to Start | Typically $250,000+ | As little as $5 with GoFundMe Giving Fund |
| Flexibility | Irrevocable | Flexible in that you decide how much to contribute and when. |
| Who You Can Support | Registered charities | Registered charities |
| Ideal For | Estate planning with appreciated assets | Everyday donors who want impact and simplicity |
Why more donors are choosing DAFs like GoFundMe Giving Funds
CRTs serve a very specific financial strategy—but for many, GoFundMe Giving Funds is a modern, accessible alternative.
Here’s why:
✅ Simple setup, zero paperwork: Create your GoFundMe Giving Fund in minutes. No legal fees, no trustees, no complications.
✅ Support the causes—and people—that matter to you: Donate to registered nonprofits, schools, or families in need through verified charitable organizations.
✅ One place to track your giving: Organize your donations year-round and get a single, simple tax receipt.
✅ Grow your giving: Invest your Giving Fund to potentially increase how much you can give over time—tax-free.
Choosing the right giving tool for you
So—how do you decide?
- A CRT trust may be right if you’re managing a large estate, want an income stream, and are working closely with a financial advisor.
- A DAF through GoFundMe Giving Funds is ideal if you want flexibility, accessibility and a way to give with emotional connection.
Example:Someone earning $150,000 might choose to use a DAF to give $10,000 this year while claiming a full tax deduction—and spreading donations to nonprofits and people in need over time.
Give with impact, give with intention
Tax-smart giving is more than a financial strategy—it’s a powerful way to turn your values into action.
GoFundMe Giving Funds make it easy to support what matters most. You can plan ahead, give on your terms, and feel good knowing every dollar goes toward the greater good.
Whether you’re giving to a nonprofit that provides meals to families or helping a teacher buy classroom supplies, every act of help matters.
Ready to get started?
This content is for educational purposes only and does not constitute tax, legal, or investment advice. Any financial or tax-related calculations provided are illustrative examples only and should not be relied upon for making financial decisions.
Laws and regulations regarding donor-advised funds vary, and tax benefits depend on individual circumstances. Readers should consult with a qualified tax, legal, or financial professional for personalized guidance.