What is a Donor Designated Fund?
A Donor Designated Fund (DDF) is a charitable giving fund that allows donors to support a specific organization or cause over time. It’s a flexible and efficient tool to manage charitable contributions while maximizing tax benefits. Because a designated fund permanently supports one specific entity, it can be useful for Qualified Charitable Distributions (QCDs) which you cannot donate to Donor Advised Funds.
How it Works
1. A donor sets up a DDF with a minimum of $5,000 and names a single beneficiary. This beneficiary may never change.
2. The donor selects who will have the ability to request grants. Typically it is the donor, but it does not have to be.
3. The fund is invested and has the potential to grow tax-free over time. Donors may add to the fund in any amount.
4. The grant requestor has the flexibility to request distributions at any time. One grant of at least $250 per year is required.
Who Should Consider a DDF?
- Individuals with traditional IRAs looking to make QCDs
- Donors who want to support a specific charity or cause
- Those seeking tax-efficient giving strategies
- Parishes, schools, or charities needing flexible, long-term funding solutions may promote DDFs to donors
Benefits of a DDF
- Can accept gifts from retirement assets (QCDs)
- Flexible timing of distributions
- Potential for tax-free growth
- Can make grants of $250 up to the full balance of the fund
- Ability to define specific uses for the funds within one charity
- Final distribution plan for remaining funds
Why Partner with the Catholic Community Foundation?
We are your Catholic partner for your philanthropy. All of our DDFs are invested according to Catholic guidelines for socially responsible investing. We are deeply rooted in our local community and are committed to providing our donors the personal touch and attention that will help them achieve their philanthropic goals, now and into the future.
Fees & Minimums
Minimum to Open: $5,000
Annual Fee: 1% – measured and paid as 0.25% quarterly
Minimum Grant: $250 per year; no limits on quantity or timing
Donor Advised Fund (DAF) vs. Donor Designated Fund (DDF)
The funds have similarities but a few key differences.
| DAF | DDF | |
| When do you choose grant recipients? | Each time you request a grant. | One time when you create the fund. Each fund can only be for one charity and cannot change. |
| When can you choose a specific purpose for the grant? | Each time you request a grant. | Each time you request a grant, unless a purpose is also pre-defined when the fund is created. |
| Can you donate QCD dollars? | No. | Yes. |
| Can you name successor advisors? | Yes. | No. |
| Are grants required every year? | No. | $250 per year (or 5% of the fund balance, if no grant is made by 12/31) |
| Can you close the fund? | Yes, by granting 100% of the balance. | Yes, by granting 100% of the balance. |
Gifted DDF
Often the donor who funds the DDF is also the individual who requests grant timing and amounts. However, the initial donor may name another individual by name or by virtue of a position they hold at a charity.
For example, a group of donors may want to get together to create a fund to support an enrichment program at a school. They create a DDF and name the principal as the grant requestor on the fund so that he or she can control the timing and amounts of grants. The role of principal is named as the grant requestor (not the individual who is occupying the role at that time) so that when the principal changes, the new person will have the same permissions.