How to Record a Donation from a Donor Advised Fund
Donor Advised Funds (DAFs) are an increasingly popular giving vehicle, and recording them correctly in your MonkeyPod is straightforward once you understand how they work. This article walks you through exactly what to do.
A quick primer on DAFs
A Donor Advised Fund is a charitable giving account managed by a sponsoring institution — such as Fidelity Charitable, Schwab Charitable, or a community foundation. A donor (the "advisor") contributes money to the fund and receives a tax deduction at that point. Later, they can recommend grants from the fund to nonprofits they want to support.
The key thing to understand for recording purposes: when a DAF grant arrives at your organization, the legal donor is the institution, not the individual donor advisor who recommended the gift. The advisor has already received their tax deduction when they contributed to the fund — they don't receive another one for recommending a grant from it.
How to record a DAF gift in your MonkeyPod
Recording a DAF gift is really just a standard donation entry with one addition — a soft credit. Here's how:
- Record the donation from the institution. The hard credit goes to the sponsoring institution (Fidelity Charitable, Schwab Charitable, your local community foundation, etc.) since that is the legal donor of record. If you don't already have a relationship record for the institution in your MonkeyPod, create one.
- Assign a soft credit to the advisor. When recording the donation, look for the Soft Credit field under the Optional section and enter the name of the individual who recommended the grant. This connects the gift to the advisor in your records and gives them appropriate recognition for directing the funds to your organization — without incorrectly crediting them as the donor of record. For more on how soft credits work, see Learn About Soft Credits.
Receipts and acknowledgments
For the sponsoring institution
The donation from the sponsoring institution is a tax-deductible charitable contribution. If the gift is coming from a community foundation, the deductibility question is largely moot — community foundations are 501(c)(3) organizations in their own right, and the gift is simply a grant from one nonprofit to another.
For the donor advisor
There is no need to send a tax acknowledgment to the donor advisor (the person you likely think of as your supporter in this transaction). They are not the donor of record, and they already received their tax deduction when they originally contributed to the fund. MonkeyPod won't automatically generate a receipt for the soft-credited advisor, so you're covered there.
You should, however, definitely thank them for their gift!
How the gift appears in your MonkeyPod
Once recorded, here's what you'll see:
- The donation appears on the institution's relationship page as a standard gift.
- The soft credit appears in the Contributions total on the advisor's relationship page. It's also listed under their Soft Credits tab as well as in their interaction history as a donation (soft credit).
- The institution is the donor of record in all reports. The advisor will not appear as a donor in standard financial reports, but their soft credit activity is incorporated in the totals for the Top Donors report. It's also visible in the Contribution Details report if you choose to display that column.
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