Switching your private charitable foundation to a donor advised fund (DAF)

What are the common challenges faced by charity trustees?

Many trustees find that the administrative burden of running a charity grows over time. You might recognise one of these scenarios:

• Your trustees are ageing and struggling with compliance and reporting.
• A new generation of trustees is reluctant to take on public-facing responsibilities.
• You are seeking a more streamlined way to manage your charitable giving.

These are common concerns we hear from private foundations looking for a more sustainable model.

How a DAF can support your giving goals?

A DAF model can offer a practical solution that allows you to continue supporting charitable causes — without the operational overhead. 
For example, our Charitable Trust is a flexible, secure donor-advised fund for managing and maximising your long-term giving. It is often considered a simpler alternative to managing a private charitable foundation. 

If you decide to convert your existing charitable foundation to a DAF, and if all your trustees agree, you can donate your charity’s assets to a DAF provider and initiate the wind down of your charity. 

For CAF Charitable Trust clients, we hold these assets and appoint the trustees (or other suitable individuals) as account holders, helping maintain continuity and control over their giving.

From there, you can:

• Recommend grants to charities in the UK and internationally.
• Focus on impact rather than administration.
• Create a succession plan to ensure your legacy continues.
  

What happens to your charity’s assets?

If your charity has investments, we may be able to work with your investment manager to maintain your existing portfolio, ensuring continuity and avoiding disruption to your financial strategy. If this is not practical, we have a range of alternative options available for short and long term investment.

Planning for succession and legacy

You can nominate successors for your DAF or provide a letter of wishes to guide future grantmaking. This ensures your charitable legacy continues in line with your values.

Is a DAF the right route for our charitable foundation?

A DAF is ideal if:

• Your charity does not fundraise from the public.
• You do not run your own charitable projects.
• You want to simplify governance and focus on impact.

If your charity does fundraise or deliver services directly, our Impact Accelerator team may be able to support you through our charity consultancy service.