DAF Rules: What Can You Use a Donor-Advised Fund For?
Donor-advised funds (DAFs) are powerful tools for those who want to be more intentional, strategic and tax-savvy in their charitable giving. But understanding what you can and can’t do with a DAF is essential—both to stay compliant with IRS regulations and to ensure your generosity creates the greatest impact.
Whether you’re exploring GoFundMe Giving Funds for the first time or already have a DAF elsewhere, this guide will walk you through the donor-advised fund rules, clarify the IRS rules for donor-advised funds, and show how you can use them to support the causes that matter most to you.
What you can use your DAF for
Here’s what’s allowed under donor-advised funds rules:
✅ Grants to IRS-qualified 501(c)(3) public charities
✅ Support for educational institutions, hospitals, and religious organizations
✅ Funding scholarship programs (under certain restrictions)
✅ Crisis relief efforts or direct community support through verified nonprofit partners
✅ Making recurring donations to the causes you care about
✅ Contributing anonymously, if desired
✅ Investing funds to potentially grow giving power (tax-free)
This flexibility makes GoFundMe Giving Funds an easy way to support charitable organizations within IRS guidelines. It’s a powerful tool for personalized, impactful giving.
What you can’t use your DAF for
To stay compliant with IRS rules for donor-advised funds, here’s what’s not allowed:
🚫 Personal benefit of any kind
You cannot use your DAF to pay for anything that personally benefits you or your family. That includes:
- Tickets to galas or charity events
- School tuition
- Membership fees to nonprofits
- Auction items or raffles
🚫 Non-charitable gifts or grants to individuals (unless through a qualified charity)
You can’t use DAFs to send money directly to an individual. However, if you want to help people in need, we make it possible to support verified charitable organizations that distribute aid to individuals or communities in crisis.
🚫 Political donations
DAFs cannot fund political campaigns or lobbying activities.
🚫 Fulfillment of personal pledges
You can’t use your DAF to fulfill a legally binding pledge you made to a charity. That said, you can recommend a grant to that same charity—you just can’t count it as fulfilling a pledge.
Who decides what’s allowed?
The sponsoring organization (like us) is responsible for ensuring all grants comply with IRS regulations. This includes confirming that grantees are qualified charities and that no private benefit occurs.
The IRS provides oversight through rules under IRC Section 4966 and Form 990, which sponsoring organizations file annually.
To help you get a feel for how you can use your Giving Fund, here are some real-life scenarios that comply with donor-advised funds rules:
| Scenario | Allowed or not allowed? | Why |
| Recommending a grant to a local animal shelter | ✅ Allowed | It’s a 501(c)(3) public charity |
| Paying for a charity gala dinner | ❌ Not allowed | You receive a benefit (meal, entertainment) |
| Giving to a nonprofit school your child attends | ✅ Allowed | So long as it’s not for tuition or personal benefit |
| Donating to a GoFundMe for a family in crisis | ✅ Allowed (if routed through a verified charity) | GoFundMe Giving Funds supports giving through charitable organizations |
| Supporting a political campaign | ❌ Not allowed | Political giving is prohibited under IRS rules |
Staying compliant: Key things to remember
To make the most of your DAF while staying within legal boundaries, keep these donor-advised fund rules in mind:
- Only recommend grants to eligible public charities. You can check IRS eligibility through their Tax Exempt Organization Search tool.
- Avoid giving that results in personal benefits, even indirect ones.
- You can’t direct funds to individuals, but you can support charities that help individuals.
- You retain advisory privileges, not control. That means you can recommend how the money is used, but the sponsoring organization has the final say.
How GoFundMe Giving Funds make it easier
Our Giving Funds help you stay organized, compliant, and connected to the causes you care about—without the paperwork and complexity of traditional platforms.
Here’s what sets it apart:
- One tax receipt for all your charitable contributions
- Invest your giving dollars tax-free so you can potentially give more over time
- Search and support real people (through [charitable organizations/nonprofits]), verified nonprofits, and grassroots movements
- Give from as little as $5—no minimum required to open an account
- No hidden fees or payout delays
Whether you’re planning your charitable giving strategy for the year, responding to a natural disaster, or celebrating a milestone with generosity, GoFundMe Giving Funds is your easy, trusted way to give with heart—and stay compliant.
If you want to learn more about the benefits of DAFs, check out our guide.
Give with clarity, confidence, and compassion
Understanding donor-advised funds rules isn’t just about checking boxes—it’s about giving with confidence. With GoFundMe Giving Funds, you don’t have to choose between ease, impact, and compliance.
Let your giving grow. Let your giving matter.
Frequently asked questions
Can I use my DAF to donate to my church?
Yes. Most religious institutions qualify as 501(c)(3) public charities under IRS rules. Just be sure your donation doesn’t come with personal benefits (e.g. paying for services or dues).
Can I support someone’s GoFundMe with my Giving Fund?
No—but if the fundraiser is connected to a verified nonprofit, you can recommend a grant to that charity. Our Giving Fund simplifies this by surfacing trusted, charitable partners aligned with your interests.
Are there penalties for breaking the rules?
Yes. If a DAF is used for an improper benefit or donation, both the donor and the fund manager can face IRS excise taxes—up to 125% of the amount misused. That’s why compliance matters.
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.