Can Donor Advised Funds Be Transferred? + FAQs

Yes, donor-advised funds (DAFs) can be transferred, but the method depends on the type of transfer (between sponsors, accounts, or beneficiaries) and IRS rules.

According to a 2024 national study by a donor-advised fund research collaborative, over 69% of donor-advised fund accounts have a successor advisor named – showing that most donors plan to transfer their DAF’s legacy to someone else.📊 Here’s what you’ll learn in this in-depth guide:

🔄 How to transfer a DAF between sponsoring organizations – step-by-step how to move your fund to a new provider (like from Fidelity Charitable to Schwab Charitable) and what rules apply.
👪 Ways to pass your DAF to heirs or other successors – how to name children or others to take over your fund and what happens to a DAF when the original donor is gone.
📜 IRS rules and legal constraints – what U.S. federal law says about moving donor-advised funds, including key regulations that keep your transfer compliant.
⚠️ Big mistakes to avoid – common pitfalls in transferring DAFs (from trying to cash out funds to sending money where it’s not allowed) and how to steer clear of them.
💡 Real-life examples and scenarios – case studies of donors who switched DAF providers or passed funds to family, plus a handy Pros and Cons table to help you decide your best transfer strategy.

What Does It Mean to “Transfer” a Donor-Advised Fund?

Transferring a donor-advised fund isn’t as simple as moving money between personal bank accounts – but it can be done in several ways. In all cases, remember that a DAF is charitable money: once you contributed those assets, they belong to a sponsoring charity, not to you personally. Here’s what “transferring a DAF” typically entails:

1. Moving a DAF between sponsoring organizations: This means changing the host of your DAF account. For example, if you have a DAF at a community foundation or a financial firm’s charity (like Fidelity Charitable’s Giving Account), you might decide to switch to another sponsor. The transfer is accomplished by having your current DAF sponsor grant the funds to a new DAF account at the other sponsor. Essentially, it’s a charity-to-charity grant – your money stays in the charitable arena, but under a different organization’s management.

2. Transferring a DAF to heirs or successors: Donor-advised funds can be passed on to the next generation. Rather than the money going directly to your kids (it can’t – it must remain for charity), you name your child or another individual as a successor advisor. This means when you die (or step down), that person gets the advisory privileges on the fund. They can then recommend grants to charities in your fund’s name going forward. In this sense, you’re “transferring” control of the DAF to an heir, allowing your philanthropic mission to continue.

3. Transferring advisory control to another person (during your lifetime): You might also change who manages the DAF while you’re still alive. For instance, you could add your spouse or adult child as a joint advisor or even resign as the fund’s advisor and appoint someone else. Many sponsors let you change the named advisor on the account. Effectively, this is a transfer of decision-making power – handing the reins of the DAF to a new person (though the assets still remain with the same sponsoring organization).

It’s important to clarify that transferring a DAF never means taking the money out for personal use. DAF assets are irrevocably charitable. Any transfer is from one 501(c)(3) charity to another, or from one advisor to another – not to an individual’s pocket. The IRS classifies donor-advised funds as accounts owned by a sponsoring nonprofit organization. The original donor (you) only retains advisory privileges over grants and investments. So when we talk about transfers, it’s always within the boundaries of charitable control.

IRS Rules and Legal Considerations for DAF Transfers

How does U.S. law view DAF transfers? The IRS and federal law set the framework that makes these transfers possible – and also limit them. Here are the key points to know:

Irrevocable charitable contribution: When you contribute to a DAF, you got a tax deduction because you made a completed gift to charity. By law, the sponsoring organization now owns the assets. As a result, you cannot undo the donation or reclaim the funds. This irrevocability is what allows transfers between charities (like a DAF-to-DAF move) – but it also means you can’t ever transfer a DAF back into a personal account or use it for yourself. The IRS requires that you relinquish control of the assets to get the deduction.
Sponsor has final say: Legally, the sponsoring organization has exclusive control over the DAF assets. You (or your successor) may make recommendations, but the sponsor must approve grants or transfers. In practice, if you request a grant from your DAF to another qualified charity (including another DAF sponsor), the sponsor will generally honor it – as long as it meets IRS rules (public charity, no benefit to you, etc.). But be aware: the sponsor can say yes or no. (For example, if you tried to transfer your DAF to a non-charity or something against policy, they would refuse.)
Qualified recipients only: Federal law dictates that DAF funds can only go to qualified charitable entities. Typically, this means IRS-recognized 501(c)(3) public charities. So, transferring your DAF is only permissible if the destination is a proper charity. You cannot transfer a DAF to an individual or a non-charitable organization. Even for other nonprofits like a private foundation (a charity usually controlled by a family or corporation), DAF-to-foundation transfers are generally not allowed. The IRS prohibits most grants from DAFs to private non-operating foundations, to prevent donors from using a DAF to circumvent tax rules (there are narrow exceptions for certain charitable-purpose foundations, but generally this is a no-go).
No personal benefit: Any DAF transfer or grant must not enrich the donor or their family. This is a core IRS rule. For instance, you cannot “transfer” your DAF by using it to pay a personal pledge or to buy something – that would violate the rules and could incur penalties. Similarly, naming a successor (like your child) to advise the fund is fine, but that successor still can’t take money out for themselves – they only gain the privilege to direct charitable grants. The IRS keeps a close eye to ensure transfers don’t equate to personal benefits.
Successor and beneficiary designations: Federal law doesn’t strictly dictate how many successors you can have or how you structure it – those details are left to the sponsoring organization’s policies. But legally, when you name a successor advisor, you’re essentially creating a plan so that advisory privileges transfer to them upon your death. This is all within the charitable domain, so it doesn’t trigger estate tax (a perk: DAF assets aren’t part of your taxable estate since you already donated them). The IRS is okay with DAFs continuing beyond the donor’s life, as long as the funds eventually go to charities.
Legal disputes and donor rights: Because the sponsor controls the assets, a donor generally can’t sue to force a transfer or grant. In fact, courts have ruled that donors lack standing to sue over management of DAF funds because they gave up ownership. For example, in a notable 2021 case, a donor who was unhappy with a DAF sponsor’s decisions tried to sue – and the court dismissed it, saying that since the donor had relinquished control in exchange for a tax deduction, he had no legal injury or property interest to protect. The takeaway: you must rely on the sponsor’s policies and goodwill; legally, you can’t compel them beyond that. Fortunately, most sponsors are very willing to carry out legitimate transfer requests.

In summary, the IRS and federal law permit transferring DAF assets between charities or to successor advisors, but always within the nonprofit framework. As long as your transfer keeps the funds devoted to charity and follows the rules (no personal gain, qualified recipients only), you’re on solid legal ground. Now, let’s look at the most common transfer scenarios and how each one works in practice.

Top 3 Ways to Transfer a Donor-Advised Fund (Compared)

There are three common scenarios where you might transfer a donor-advised fund. The table below gives a quick comparison of these options – what they involve and how they work:

DAF Transfer Scenario	Can It Be Done & How It Works
Move DAF to a new sponsor Switching providers	Yes – allowed and straightforward. You request a grant from your current DAF to the new sponsoring charity (where you’ve opened a DAF). The money moves charity-to-charity. Most major sponsors permit this. It’s essentially a rollover of your fund. No new tax deduction is given (since it’s not a new personal donation), but also no tax penalty – the full amount transfers to the new DAF.
Pass DAF to a successor advisor Leaving it to heirs/others	Yes – by naming successor(s). You instruct your DAF sponsor to designate one or more individuals as successor advisors for the fund. Upon your death (or incapacity), the successor gains advisory control of the DAF. The fund stays with the same sponsor (unless the successor later moves it), but who directs the grants changes. Many sponsors let you name multiple successors and will split the account for them. This keeps your charitable legacy alive through the next generation.
Change or add an advisor now Transferring control during life	Yes – typically possible. You can usually add a co-advisor (e.g., your spouse or child) who can make grant recommendations alongside you. You may also change the primary account holder by contacting the sponsor if you want someone else to take over now. Essentially, the sponsor updates their records to make that person the advisor on the DAF. This is a form of transfer of leadership (though not ownership). Sponsors will require written authorization, but it’s doable.

As you can see, all three types of transfers are possible, though they differ in process. Below, we’ll dive deeper into each scenario, with tips and examples to illustrate them.

Transferring a DAF to Another Sponsor (Provider)

Switching your donor-advised fund to a new sponsoring organization is a common transfer scenario. This is often referred to as “rolling over” your DAF. Maybe you started your fund at one charity and now you’ve found another provider that better fits your needs – for instance, it offers lower fees, more investment choices, or aligns with your values.

How to do it: Transferring between DAF sponsors is usually as easy as recommending a grant from your current DAF to the new sponsor’s DAF program. Concretely:

Open a DAF account at the new sponsor you’ve chosen. (For example, if you’re moving from ABC Community Foundation to Fidelity Charitable, you’d open a Giving Account at Fidelity Charitable first. Often a minimum contribution is required to open, but you can fulfill it via the transfer itself.)
Submit a grant recommendation from your existing DAF to the new one. In your current fund’s online portal or form, you’d list the new sponsoring charity as the grantee. You might specify in the memo that it’s for “[Your Name] DAF account transfer.”
The current sponsor sends the funds to the new sponsor. This might be via check or electronic transfer, just like any other grant. The new sponsor receives the money and allocates it into your new DAF account.
Close the old account (if desired). Once you’ve moved the amount you want (it could be all or part of the fund), you can choose to close the original DAF. Or, some donors keep multiple DAFs for different purposes – that’s up to you.

Example: Linda had a donor-advised fund with a large financial institution’s charity, but found their grantmaking policies too restrictive for her liking. She researched and decided to move her fund to a more flexible independent sponsor. She opened a DAF with the new sponsor online and then requested a grant for the full balance of her old DAF to the new one. Within two weeks, her $50,000 was sitting in her new DAF account. Linda was then free to invest those assets under the new sponsor’s options and continue granting to charities – now with a sponsor she preferred. The transfer cost her nothing, and the charities she supports didn’t notice any interruption.

Why transfer providers? Donors switch DAF sponsors for many reasons:

Better investment options or the ability to let your financial advisor manage the DAF investments (some sponsors like community foundations or independent DAF sponsors allow outside investment managers, whereas others have fixed portfolios).
Lower administrative fees or lower minimums at the new sponsor.
Improved customer service or technology (a more user-friendly grantmaking platform).
Philosophical alignment – e.g., moving to a sponsor that supports your ideological or geographic focus. (Some donors have moved funds from national commercial sponsors to community-focused foundations or vice versa, depending on their goals.)
Sponsor policies: maybe the old sponsor wouldn’t allow a certain charity or had limits (like requiring at least one grant a year or disallowing anonymous grants). A new sponsor might offer more freedom.

The good news is that nearly all DAF sponsors allow transfers. Even if they don’t advertise it, they will process your grant to another sponsor, because ultimately it’s a grant to a qualified charity. The process is generally quick and does not trigger any tax events. (You already took a deduction when you first funded the DAF; moving it is just shifting charitable dollars around – no new deduction, but also no tax penalty.)

Tips:

Check with both sponsors: It’s wise to call your current sponsor and your new one. The current sponsor can guide how to fill out the grant request properly (some have a specific procedure for “DAF transfers”). The new sponsor might have an account transfer form or simply instruct you how to label the incoming grant.
Timing: Initiate the transfer well before year-end if you want it done in a certain tax year or before making grants for a project. Transfers can take a few days to a few weeks.
All or part: You don’t have to move the entire fund. You could, for example, transfer half to a new sponsor and keep half with the old (though maintaining two DAFs might only make sense if you have a strategy for each). Some donors consolidate multiple DAFs into one for simplicity.
No extra cost: There’s typically no fee to transfer out, apart from any transaction costs like selling investments to cash (which would happen for any grant). Do verify if your old sponsor has any account closure policy or requires a certain form to close the account.

In summary, transferring your DAF to a new sponsor is completely doable and can be beneficial if your current provider isn’t the best fit. Just remember that you’re not withdrawing money personally – you’re simply instructing Charity A to grant the funds to Charity B (your new sponsor), keeping the funds in the charitable universe.

Passing Your DAF to Heirs or Other Successors

One powerful feature of donor-advised funds is the ability to extend your philanthropy beyond your lifetime. Rather than have the DAF end when you die, you can transfer its advisory role to someone else – often a child or other family member who will carry on the giving in your name. This is done through naming successor advisors.

How it works: When you set up your DAF (or anytime during your life), you give your sponsoring organization instructions on who should take over the fund upon your death. You can usually name one or several successor advisors (and list the order or proportion if multiple). Each sponsor has its own form for this – typically part of the account agreement or an online beneficiary designation.

After you pass away, the sponsor will offer the role to your named successor(s). That successor will then effectively become the new donor-advisor on the account – they can log in, recommend grants, and manage the fund just as you did. The money stays in the DAF (again, it doesn’t go to the person directly), but that person now controls where it goes charitably.

Example: Robert and Susan have a $200,000 donor-advised fund at a national charity. They name their two adult children as 50/50 successor advisors. When Robert and Susan eventually pass, the sponsor splits the fund into two new DAF accounts – $100,000 for each child – as per their plan. Each of their children now has their own DAF (inherited from the parents’ fund) and can continue to support charities that mattered to the family. One child donates a lot to environmental causes, the other to education – reflecting both their parents’ legacy and their own interests. This transfer to heirs was seamless and tax-free. Importantly, neither child ever owned the money personally, but they have the joy and responsibility of granting it to nonprofits over time.

What to consider when naming successors:

Sponsor policies: Different sponsors have different rules on how many successor generations you can have. Some community foundations might only allow the fund to continue for one generation after you, then require the remaining funds go to the foundation’s general charitable endowment. Others (like big national DAF sponsors) allow perpetual succession – your successors can name their successors, and so on, theoretically keeping the fund going indefinitely. Check your sponsor’s perpetuity policy. If you want a multi-generational family fund, choose a sponsor that permits that.
Multiple successors: As illustrated, many sponsors let you split the fund among multiple people. Typically, you’d assign percentages (e.g., each child gets an equal share). The sponsor will either split into new accounts or make them co-advisors on one account, depending on the setup. Splitting is common so each successor can act independently. Make sure your percentages total 100% or your instructions are clear (some allow a combination of people and charities – e.g., “50% to my daughter’s new DAF, and 50% to be granted out to XYZ Charity”).
Alternate plans: What if your named successor doesn’t want to continue the fund, or isn’t around? It’s wise to have a backup. Sponsors often allow naming a charitable beneficiary as well – meaning if no successor is able to serve, the remaining DAF assets will be granted out to specific charities you name or to the sponsor’s own charitable fund. For example, you might say “If my spouse or kids don’t take it on, grant everything to the Red Cross and local food bank.” This ensures your DAF is ultimately used how you intended.
Age and capacity: You generally can’t have a minor child formally take control of a DAF (most sponsors require successors to be 18 or older). If your kids are young, you can still name them, but the sponsor will likely hold the fund until they’re of age or allow a guardian to advise in the interim. Also, you can name a trust or an entity in some cases as successor, but rules vary – often it’s meant to be an individual.
Communication: It’s a good idea to discuss your plan with the person you’re naming. Make sure your successor wants to do it and understands the responsibility (and opportunity!) they’ll have. It can be a wonderful way to involve family in philanthropy, but it shouldn’t come as a surprise.

From a legal perspective, transferring a DAF to heirs via successor designations is quite smooth. There’s no probate on these funds because technically they belong to the charity (similar to how life insurance or retirement accounts pass by beneficiary designation). The IRS views it simply as the charity continuing to hold those assets for charitable use. Your estate doesn’t count the DAF as part of your assets (you already got your deduction when funding it), so it can also reduce estate tax burdens and simplify estate administration.

One more angle: Instead of human successors, some donors choose to transfer the DAF to charitable beneficiaries at death. That isn’t a “transfer” in the ongoing sense, but rather an ultimate distribution. For example, you could instruct that upon your death, your DAF should pay out 100% to certain nonprofits (effectively closing the fund). In that scenario, the transfer is from your DAF to those charities, fulfilling your legacy wishes immediately. It’s an alternative if you don’t have someone to take over or if you prefer a clean wrap-up.

In summary, naming a successor is a powerful way to transfer the baton of giving. It ensures your DAF can live on and continue supporting good causes under someone else’s guidance. Just be sure to align with your sponsor’s policies and keep those designations updated if circumstances change (you can usually update successor info anytime).

Changing the Advisor on Your DAF During Your Lifetime

You don’t have to wait until death to transfer a donor-advised fund’s advisory control. Sometimes, donors want to step back and let someone else take charge, or they want to share control. Most DAF sponsors offer flexibility through multiple advisors or by changing the primary advisor.

Adding a co-advisor: The simplest way to share control now is to add a secondary or joint advisor to your DAF. For instance, you can typically add your spouse, a family member, or any trusted person as a co-advisor on the account. This means both of you can log in, recommend grants, etc. Many families do this so that philanthropy is a shared activity. It’s also a way to train the next generation – you might add your adult child as a junior advisor so they learn the ropes of giving.

Changing the primary advisor: If you want to fully hand over the DAF to someone else now (say you’re retiring from active involvement, or you feel your sibling would do a better job managing it), you can request the sponsor to change the account’s primary advisor to that person. Essentially, you’d be stepping down from the decision-maker role, and the new person steps up. This is a bit like making your successor immediate instead of waiting.

To do this, sponsors will typically require:

A written request or form signed by the current advisor (you) to relinquish advisory privileges.
Acceptance/signature by the new advisor.
Possibly, some documentation of the relationship or the reason (for their records, since it’s less common than naming a successor at death, but it’s still allowed).

Once processed, the account on record will list the new person as the advisor, and you might either be removed or downgraded to a secondary role.

Use case example: Maria, in her late 80s, has a DAF but finds the administration cumbersome now. Her nephew, who’s actively involved in charity work, is willing to take it over. Maria contacts the sponsoring foundation and fills out the necessary paperwork to make her nephew the primary advisor on the fund effective immediately. The sponsor updates their records – now the nephew has full ability to recommend grants and Maria is essentially hands-off (though she could remain as an interested party to see what’s happening). This way, Maria transfers the operational control of the fund during her lifetime, ensuring continuity and lessening her own burden.

Another scenario might be if someone becomes incapacitated – ideally, if you have a durable power of attorney or a co-advisor already in place, that person can manage the DAF while you cannot. Otherwise, adding a trusted co-advisor proactively can cover that base as well.

Important note: Transferring advisory control doesn’t change anything about the fund’s assets’ status – they’re still charitable dollars with the sponsor. It’s more of an administrative transfer of who gets to make suggestions. But it’s significant for practical control.

Limitations: Sponsors will not allow just anyone to take over if it seems fishy. The new advisor still must abide by all DAF rules. Also, if you wanted to remove yourself and put someone else entirely, make sure you understand that you won’t be able to later assert control unless they give it back or you become a co-advisor again. Essentially, you’re gifting the influence over those charitable assets to another person (again, not ownership – but influence).

Most donors who add advisors do so with family members or close associates in mind. For example, spouses commonly are joint advisors on the same fund. If one passes, the other automatically keeps control (this can even negate needing a formal successor process for the first death). You can have multiple co-advisors in some cases (like two spouses and an adult child all managing one fund as a committee).

In sum, transferring a DAF’s advisory role during life is usually as simple as updating the account’s authorized individuals. It’s a flexible tool to adapt to life changes – ensuring the DAF continues to be managed effectively by whomever you trust.

Pros & Cons of Switching Your DAF to a New Sponsor

Should you move your donor-advised fund to a different provider, or keep it where it is? Like any financial or philanthropic decision, there are advantages and potential drawbacks. Here’s a quick look at the pros and cons:

Pros 👍 (Switching DAF Providers)	Cons 👎 (Switching DAF Providers)
Lower Fees & Better Growth: You might find a sponsor with lower administrative fees or more investment options, potentially growing your fund faster (and yielding more charity dollars).	Time & Effort to Transfer: Moving a DAF takes a bit of paperwork and coordination. It’s not terribly hard, but it’s an extra task – and during the transfer, grants might be on hold for a short period.
Aligned Values or Mission: You can choose a sponsor that shares your philanthropic values or focus area (e.g., a faith-based fund or local community foundation), which can make your giving more meaningful.	Loss of Unique Benefits: Your current sponsor might have perks you’ll lose – for example, exclusive events, special grant matching programs, or legacy recognition in your community.
Better Service: If you’ve experienced slow grant approvals or poor service, another provider might offer more responsive support and modern tools (online dashboards, donor events, etc.).	Tax Nuances: Generally there’s no tax impact, but if you’re in a state with tax credits for certain in-state donations, moving funds out-of-state could forgo those local incentives (minor issue for most, since tax benefit was upfront at donation).
Flexibility with Advisors: Some sponsors (like independent ones) let your financial advisor manage the fund’s investments or allow complex assets. If your current fund doesn’t, switching can give you more flexibility in how the fund is run and what you can donate.	Sentimental/Community Ties: If your DAF is at a community foundation, for example, keeping it there might support that community’s reputation or obligations. Moving it could be seen as pulling resources from a community cause. (This is more of an intangible consideration.)
Policy Freedom: A new sponsor might have fewer restrictions on grants (except the legal ones) – e.g., willing to grant to the charities you choose without extra hurdles. If you faced frustration like denied grant recommendations at your old sponsor, a switch can solve that.	Need to Re-establish History: Your grant history may not carry over. You might have to export records from the old fund. Also, charities that used to receive checks from “ABC Sponsor – [Your Fund Name]” will now see a different sponsoring charity name, which could cause mild confusion initially.

Bottom line: If you’re unhappy or limited with your current DAF provider, the pros of switching often outweigh the cons – especially with how easy transfers are. However, if your current sponsor meets your needs well, there’s no requirement to move. Many donors happily stay with one fund for life. Weigh what matters most: fees, convenience, alignment, service, and so on. The good thing is you have options in the DAF world, and you’re never locked in if circumstances change.

Things to Avoid When Transferring a DAF 🚫

Transferring a donor-advised fund is usually straightforward, but there are some pitfalls and mistakes to watch out for. Avoid these to ensure your fund stays in good standing and your transfer goes smoothly:

🚫 Trying to take cash out for yourself. A DAF transfer cannot be used to put money back in your hands or pay personal expenses. For example, don’t attempt to “transfer” your DAF to your own bank account or to a non-charity – the sponsor will refuse, and it violates IRS rules. Once in a DAF, money is locked for charity only.
🚫 Using a DAF to fulfill personal pledges or obligations. Perhaps you pledged a $10,000 donation to a museum – you might think of transferring DAF funds to honor that. But IRS guidelines prohibit using DAF grants to satisfy a personal pledge. Even though the money ends up at the charity, it would be credited as your pledge fulfillment, which is considered an impermissible benefit. Always avoid this situation (some sponsors have you certify grants are not paying a pledge or buying tickets, etc.).
🚫 Trying to grant to disallowed recipients. When transferring or granting out of your DAF, stick to eligible charities. Don’t try to get clever by sending funds to a private foundation you control, a political campaign, or an individual in need. DAFs can’t do those. If you initiate a transfer to another DAF sponsor, make sure that sponsor is a public charity in good standing (almost all major ones are). If it’s an unusual or new charity, the sponsor will vet it – if it’s not qualified, the transfer won’t happen.
⚠️ Not checking sponsor-specific rules. Each sponsoring organization might have quirks. For instance, some community foundations may not allow naming unrelated successors, or might require a portion of the fund to eventually go to their endowment. Before planning a transfer or naming heirs, read your fund agreement or ask. Avoid assuming that every DAF works the same. If a particular feature (like perpetual succession or accepting real estate gifts) is important, confirm it – otherwise you might transfer to a new sponsor and be surprised by a limitation you didn’t expect.
⚠️ Waiting too long to arrange transfers. If you intend to transfer your DAF (either to a new sponsor or to heirs in your estate plan), don’t procrastinate important updates. Life is unpredictable. Failing to name a successor, for example, could mean your fund, by default, goes to the sponsor’s charity programs when you’re gone. And if you want to switch sponsors due to dissatisfaction, don’t just sit on an under-performing fund – meanwhile your charitable dollars could be doing more good. Basically, avoid inertia if a transfer would better fulfill your goals.
⚠️ Forgetting to update your charitable legacy plans. Maybe you named one child as successor initially, but now you have another child or your mind has changed. Or you planned to leave funds to a charity that no longer exists. Regularly review and update successor and beneficiary instructions on your DAF. This isn’t exactly a “transfer” mistake, but it’s related – a lot of donors set it and forget it. Keep it current to avoid headaches or conflicts later.

By keeping these cautions in mind, you’ll ensure that any transfers or changes you make with your donor-advised fund are done by the book and with minimal fuss. When in doubt, communicate with your sponsor – they are usually happy to guide you on proper procedures so you don’t run afoul of any rules.

Real-Life Insights: DAF Transfer Trends and Examples

To put things in perspective, let’s look at some real-world data and stories around donor-advised fund transfers:

Transfers are happening (but purposefully): It’s not every day that donors move money between DAFs without reason – but it does occur, especially as the DAF market evolves. In recent years, analyses have shown billions of dollars moving between DAF accounts. For example, in one study, at least $1 billion was transferred in a single year from commercial DAF sponsors (like those run by financial firms) to other DAF sponsors. This suggests that donors do shop around for better fit or consolidate multiple accounts. However, these DAF-to-DAF moves still represent a small fraction of total grants (many donors primarily grant to active charities). The key point is that donors have the flexibility to reallocate funds between sponsoring charities, and some are using it as their needs change.
Combining family philanthropy: Some prominent philanthropists use both private foundations and donor-advised funds. There have been instances where a family decides to terminate a private foundation and roll it into a DAF (which is like a reverse transfer scenario). They do this to reduce administrative burdens while retaining philanthropic capital. This is perfectly legal – a private foundation can grant all its assets to a public charity DAF. Once in the DAF, the funds are easier to manage (no more annual 5% payout requirement or separate tax filings). On the flip side, as mentioned earlier, you wouldn’t transfer the other way (from DAF to a family foundation) because that’s generally not allowed.
Ideological shifts leading to transfers: A real-life example comes from donors who felt their values didn’t align with a big national DAF sponsor. In one highly publicized story, some donors found that their DAF provider was hesitant to approve grants to certain conservative-leaning nonprofits. Frustrated, these donors moved their DAFs to a different sponsor (one that explicitly supports their ideological perspective). This underscores that if a sponsor’s mission or grant policies conflict with a donor’s intent, the donor can vote with their feet and transfer out. It’s a reminder that sponsors do have discretion on grants, so finding one that fits your approach can be important.
DAF transfers and the law: Lawmakers and watchdogs have noticed the trend of DAF-to-DAF transfers too. There’s been some debate that when money just moves from one fund to another, it hasn’t yet reached an active charity doing on-the-ground work. Critics argue this can artificially boost “payout rates” reported by DAF sponsors (since a transfer counts as a payout on paper, even though the funds are still parked in a charitable account). As a result, some reform proposals have suggested more transparency around these internal transfers. For now, though, no specific laws curb transferring your DAF – it remains a valid practice, and often it’s done for good reasons (not to delay giving indefinitely, but to improve how the funds are managed or to gather family funds together).
State-level nuances: While federal law governs DAFs uniformly, states can have their own influence. For example, California recently required more reporting from charities that sponsor DAFs, shedding light on patterns like DAF-to-DAF transfers and how long funds stay put. But importantly, no state prohibits or uniquely restricts transferring a DAF to another qualifying charity. If you live in one state and your DAF sponsor is in another, that’s generally a non-issue; philanthropy flows across state lines freely. One thing to note: if a local community foundation has a policy to keep funds local, transferring out would simply mean you’re closing that fund (which they allow as a grant out). Just ensure any state tax credit you might have received (some states give credits for donations to certain local charitable accounts) won’t be clawed back if you move funds – typically it won’t, because the original donation was what earned it.

These insights highlight that donor-advised fund transfers are not just theoretical – they’re part of the evolving landscape of charitable giving. Donors are using the flexibility of DAFs to maximize impact, whether that means consolidating resources, changing strategies, or ensuring their philanthropic intent is honored.

In the end, a donor-advised fund is a tool. Transferring it – whether to a new manager or a new host – is one way to make sure that tool continues to serve your charitable goals in the best way possible.

FAQ: Donor-Advised Fund Transfers (U.S.)

Can I move my donor-advised fund to another sponsor? Yes. You can transfer your DAF to a different sponsoring organization by recommending a grant from your current fund to the new sponsor’s DAF program. It’s a charity-to-charity transfer.

Can I transfer a donor-advised fund to an individual? No. DAF assets can never be given to an individual for personal use. You may name an individual as a successor advisor to take over management of the fund, but they can’t withdraw the money.

Do I have to name a successor for my DAF? No. Naming a successor advisor is optional. If you don’t, when you pass away the sponsoring charity will distribute the remaining funds to charities based on either your previously set charitable beneficiaries or its default policy.

Can I have multiple successors on one donor-advised fund? Yes. Many DAF sponsors allow more than one successor. Typically, the fund will be split into separate accounts for each successor, or they’ll share advisory rights according to your instructions.

What happens to a DAF when the donor dies? It depends. If you named a successor, that person takes over advising the fund. If not, the remaining DAF assets are granted out to charities – either those you designated or, if none specified, per the sponsor’s guidelines (often to its charitable fund or past grantees).

Are transfers from one DAF to another taxable events? No. Transferring funds from one DAF to another is not a taxable event for you. You don’t get a new deduction (since you already received one for the original donation), and there’s no tax penalty – the money remains in the charitable system.

Can I withdraw money from my donor-advised fund for myself? No. Once money is in a donor-advised fund, it cannot be taken back out for personal use under any circumstances. The funds can only be used for grants to qualified charities.

Can a private foundation be converted or transferred into a DAF? Yes. A private foundation can wind down and grant its assets into a DAF (this is a permitted way to simplify a foundation). However, a DAF generally cannot grant out to a private foundation that you or your family control.

Do donor-advised funds have to spend money each year? No. There’s currently no federal minimum annual distribution requirement for DAFs. Unlike private foundations, DAFs don’t have a set payout rule, so funds can be held and invested as long as needed. (Some sponsors encourage regular granting or may have inactivity policies, though.)

Can I merge two donor-advised funds together? Yes. You can consolidate multiple DAF accounts by granting one fund’s assets into another. This is essentially the same process as transferring to a new sponsor – one DAF makes a grant to the other’s sponsoring charity. Combining accounts can simplify your giving.