This guide is for the church administrator or volunteer treasurer who has just opened an envelope from a DAF sponsor. It covers how grants arrive, how to get on the sponsor's records, what to send the donor, and how to record the gift. It is general information, not tax or legal advice. The IRS's rules for receipts are in Publication 1771, and your accountant can tell you how they apply to your organization. We read every sponsor page below in November 2026. Sponsors change their processes, so check with yours.
What is a donor-advised fund?
It is a charitable account that someone opens at a sponsoring charity. They put money in, take their deduction then, and later recommend grants to charities they like. The IRS describes a DAF as "a separately identified fund or account that is maintained and operated by a section 501(c)(3) organization", and adds: "Once the donor makes the contribution, the organization has legal control over it." The donor keeps "advisory privileges" only. That is why the check carries the sponsor's name, not your member's.
Large national sponsors include Fidelity Charitable, Vanguard Charitable, National Philanthropic Trust and DAFgiving360, which was renamed from Schwab Charitable in June 2024. Many community foundations and denominational foundations run DAFs too. Fidelity Charitable, which calls its program the largest in the country, says its donors "recommended more than $18.3 billion in grants to support nearly 227,000 charitable organizations" in 2025.
How do DAF grants arrive?
By paper check unless you sign up with the sponsor for electronic payment. Each sponsor runs its own system, and signing up with one does not sign you up with the others.
| Sponsor | How grants are paid | How to update your details |
|---|---|---|
| Fidelity Charitable | Checks go to "the addresses listed on your organization's IRS Form 990" unless you enroll in its free electronic transfer, through Stripe or ACH (a direct bank deposit). Funds arrive in 1-2 days either way. | Stripe: in your Stripe dashboard. ACH: resubmit the ACH enrollment form. Phone 800-952-4438, prompt 4. |
| Vanguard Charitable | PayPal Grant Payments, which it says delivers funds "in a matter of minutes". | Sign up or check your details at paypal.com/charities. Other questions: [email protected] with your legal name and EIN. |
| National Philanthropic Trust | Checks, or PayPal Grant Payments if you sign up at paypal.com/charities. | Through PayPal for electronic payments. |
| DAFgiving360, community foundations, others | Each sponsor sets its own process. | Call the sponsor named on the check. |
Fidelity's ACH enrollment needs your EIN, bank details, two contacts and "a voided check or bank letter dated within the last 12 months", and it warns that "the ACH enrollment queue may take several weeks." Its Stripe enrollment needs your EIN, bank details, an email address and a phone that can receive texts. Because checks go to the address on file, update it with the IRS and with each sponsor when you move. Churches don't file a Form 990, so if you are a church, call Fidelity to confirm which address it has.
One thing to know if you use Donor Merchant: it records only payments made through its own donation form. A grant deposited into your Stripe or PayPal account by a sponsor is not recorded automatically. You add it by hand, as shown below.
How do sponsors find and verify our church or nonprofit?
Mostly from IRS records, so make sure yours are right. Fidelity says it "uses IRS data to display your organization's name" to donors, and asks charities to make sure the name they use publicly "matches the name you have registered with the IRS" and to make the tax ID easy to find on their website. Vanguard says it checks "tax-exempt status, the intended use of the grant, and any potential impermissible benefits", and that "Religious, government or supporting organizations may require additional information."
Churches are a special case. The IRS says churches that meet the 501(c)(3) rules "are automatically considered tax exempt and are not required to apply" (Publication 1828), so some churches have no IRS letter and do not show up in the IRS's Tax Exempt Organization Search. Others are covered by their denomination's group ruling. The IRS rules that let sponsors rely on IRS listings do not cover an organization "not listed in or covered by Publication 78 or the BMF extract", or local organizations in a group ruling (Rev. Proc. 2011-33). So if your church is in either group, the sponsor may ask you for papers: an IRS letter if you have one, or a letter from your denomination confirming you are on its group list. Call the sponsor named on the check and ask what it needs.
What should our donate page say for DAF donors?
Give donors what they type into the sponsor's grant form:
- your legal name, exactly as the IRS has it
- your EIN (federal tax ID)
- the mailing address for checks
- a request to share their name and address with the sponsor so you can thank them
Vanguard suggests "mentioning DAFs on your website, in fundraising efforts, and on promotional materials." Some vendors sell a DAF button that lets donors start a grant from your page. Donor Merchant does not have one, and it has no lookup of DAF sponsors.
What do we send the donor after a DAF grant?
A thank-you letter with no tax receipt language. The sponsors are clear about this:
- Fidelity Charitable: "The donor was eligible to claim their tax deduction upon making a contribution to Fidelity Charitable, not when recommending grants to charities like yours." Any language implying a deduction "should be removed from your acknowledgment and you should not send the donor a tax receipt."
- Vanguard Charitable: "you may thank them, as long as acknowledgment of the gift goes to Vanguard Charitable and a tax receipt is not issued." It adds that you do not need to send Vanguard a receipt either.
- National Philanthropic Trust, asked if you still issue a receipt: "You don't - and you shouldn't!"
The donor's own receipt came from the sponsor when they paid into the fund. IRS Publication 526 says that deduction needs a written acknowledgment from the sponsor that it "has exclusive legal control over the assets contributed." Your $250-and-over receipt rules in Publication 1771 are for gifts the donor makes to you directly.
A thank-you along these lines works: "Thank you for recommending a grant of $500 from the Smith Family Fund at Fidelity Charitable, which we received on March 3. It will help fund our food pantry." We would leave out the words "tax-deductible" and the "no goods or services were provided" line, because those make a letter read like a tax receipt.
If the grant is anonymous, there is no one to write to. NPT says "no need to thank them or us", and you can thank anonymous donors publicly if that is your custom. Fidelity says only 4% of its grants are anonymous, so most come with a name, and often an address, on the letter that comes with the check.
Can a DAF grant pay for event tickets, a membership or a pledge?
Tickets and benefits, generally no. A 2017 IRS notice says the IRS was considering rules that would treat a DAF grant that "subsidizes the Donor/Advisor's attendance or participation in a charity-sponsored event" as an improper benefit to the donor, and that a donor who wants tickets "can make the contribution directly" (Notice 2017-73). Those rules have not been issued yet: the IRS's 2023 proposed DAF regulations cover a different section of the tax code and leave these topics for future guidance. Sponsors also set their own granting rules on top of that. So if a grant arrives for a gala table, a golf foursome or a member benefit, call the sponsor before you send tickets.
Pledges are more nuanced. The same IRS notice says a DAF grant to a charity where the donor has made a pledge would not count as an improper benefit to the donor if the sponsor makes no reference to the pledge, the donor gets no other benefit, and the donor does not try to deduct the grant, "even if the distributee charity erroneously sends the Donor/Advisor a written acknowledgment." Taxpayers may rely on that approach "until additional guidance is issued." Sponsors may be stricter: Vanguard's pledge guidance treats using a DAF to pay a legally binding pledge as an impermissible benefit. If your church uses pledge cards, ask your accountant whether yours are binding.
How do we record a DAF grant in the books?
As a gift from the sponsor, with the donor noted. The sponsor legally made the gift, so the income line names the sponsor. Most treasurers also note who recommended it, often called a "soft credit": credit to the person behind a gift, without counting them as its source. That lets you thank them and see their full support. Keep the grant letter with a copy of the check or deposit. Ask your accountant how they want soft credits shown in your reports.
How do we record it in Donor Merchant?
Record it under the sponsor's name, not the donor's. Donor Merchant's annual giving statement lists every completed gift on a donor's record for the year. It also shows your custom receipt statement from Settings > Email > Printable receipts or, if "Tax-deductible" is ticked there, standard tax language. Donors can open that statement and a printable receipt for each gift from the donor portal. Record the grant under your member, and it lands on their statement as if they gave it, which is the receipt the sponsors say not to send.
- Go to Settings > Payments > Offline gifts and add
DAF grantto the "Payment methods" list (one per line). Donors never see this list. - Go to Donations and click Add donation.
- For the name, type the sponsor across the two boxes, for example "Fidelity" and "Charitable". The email must be an address you control, and a different one for each sponsor, because Add Donation matches donors by email. If your email service supports plus addressing ([email protected]), that works. Ask whoever runs your email.
- Enter the amount, choose DAF grant as the method, and set the date to the day the money arrived.
- In Reference, put the grant or check number and the donor's name, for example "Grant 4471023, advised by Jane Smith". It shows in the Donations list, and searching Donations for "Smith" finds it.
- Pick a campaign if the grant letter names one. Leave "Email a receipt to the donor" unticked. It starts unticked.
Know the limits. Add donation has a campaign field but no fund field. A gift you add still goes out to any webhooks you have set up, such as a Zapier connection. Nothing imports grant reports from sponsors, so each grant is entered by hand. See the offline gifts docs for the screens involved.
Sources
- IRS: Donor-advised funds (read November 2026)
- IRS Publication 1771, Charitable Contributions: Substantiation and Disclosure Requirements (Rev. 11-2023) (read November 2026)
- IRS Publication 526 (2025), Charitable Contributions (read November 2026)
- IRS Publication 1828, Tax Guide for Churches and Religious Organizations (Rev. 8-2015) (read November 2026)
- IRS Notice 2017-73, Donor Advised Funds (read November 2026)
- Treasury and IRS: Proposed regulations on taxable distributions from donor-advised funds (Nov. 2023) (read November 2026)
- IRS Rev. Proc. 2011-33, Internal Revenue Bulletin 2011-25 (read November 2026)
- Fidelity Charitable: Nonprofits frequently asked questions (read November 2026)
- Vanguard Charitable: Nonprofit organizations (read November 2026)
- Vanguard Charitable: Granting due diligence, pledges (read November 2026)
- National Philanthropic Trust: For nonprofits (read November 2026)
- Schwab: Schwab Charitable renamed DAFgiving360 (June 2024) (read November 2026)