Handbook·Money in politics

What is a donor-advised fund

Explainer·Verified 2026-07-10

The answer

A donor-advised fund (DAF) is a charitable account held at a sponsoring organization, such as Fidelity Charitable, Schwab Charitable, Vanguard Charitable, National Christian Foundation, or DonorsTrust. A donor contributes cash or assets, takes an immediate tax deduction, and then "advises" the sponsor on which charities should later receive grants. The folk model treats a charitable donation as a single, traceable transaction with a deduction on one end and a named gift on the other. The plain mechanic here is that the sponsor, not the donor, legally owns the money the moment it's given, and no federal law sets a deadline for when, or whether, it must ever be granted out.¹

How it actually works

The tax break happens up front, at contribution. The public disclosure happens later, if at all, when the sponsor reports a grant on its own Form 990. That filing lists the sponsoring organization as the grantor, not the original donor. A gift can sit in the account for years, earning investment returns, before any money reaches a working charity or advocacy group. Because the sponsor is the only name that shows up in public records, a single wealthy donor's identity can be fully obscured while still funding groups that lobby, litigate, or organize on live political fights.

DonorsTrust, built for conservative and libertarian donors,² has been called the "dark money ATM of the conservative movement" since a February 2013 Mother Jones investigation by Andy Kroll first used the phrase.³ It reported $351 million in grants in fiscal year 2023, up from $242 million the year before, while holding more than $1.2 billion in assets.⁴ A 2024 DeSmog investigation of Form 990 filings found that Fidelity Charitable, Schwab Charitable, and Vanguard Charitable, three mainstream commercial DAF sponsors, sent at least $171 million combined to Project 2025-affiliated nonprofits since 2020, including $10.2 million to the Heritage Foundation itself. DonorsTrust sent $66 million to Project 2025 groups over the same period, less than the three commercial sponsors combined.⁵ These figures are floors from a single investigation's review of tax filings, not an audited total, since DAF sponsors aren't required to itemize original donors in public records.

The pattern isn't confined to one side. On the left, the Sixteen Thirty Fund, a 501(c)(4) fiscally sponsored by the for-profit consulting firm Arabella Advisors, spent about $410 million in the 2020 election cycle without disclosing its donors.⁶ It isn't a donor-advised fund in the technical sense, it's a fiscally sponsored nonprofit, a legally distinct vehicle, but it runs on the same donor-anonymity logic.

Who holds the power

The sponsoring organization holds legal title to the assets and decides, on the donor's advice, when and where grants go out. The original donor keeps a tax deduction taken up front and, in public filings, a name that never has to appear again.

Where you come in

When a group's funding traces only to "DonorsTrust," "Fidelity Charitable," or a similar sponsor name in a news story or 990 filing, that name is the end of the visible trail, not the source. Reading a group's donor list critically means checking whether major funders are named individuals or foundations, or whether they're DAF sponsors standing in for someone undisclosed. See how to look up who funds your representative for the disclosed side of this comparison.

Glossary: donor-advised fund · dark money · 501(c) distinctions

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