Gifts that arrive another way: donor-advised funds, IRAs and matching gifts

This guide is for charities that have just received a check from a "fund" or a retirement account administrator instead of from the donor, and aren't sure who to thank or what receipt to send. It's also for charities that want to invite these gifts on purpose. Donor-advised funds, IRA distributions and employer matching gifts can all bring in real money, but each works differently. After reading, you'll know who the donor is in each case, what to put in your thank-you, and how to ask.

Donor-advised funds

A donor-advised fund (DAF) is an account at a charity called a sponsoring organization. The IRS explains that once a donor gives to the fund, the sponsoring organization has legal control over the money, and the donor keeps advisory privileges: they can recommend which charities receive grants. See the glossary entry for donor-advised fund.

So when a DAF grant reaches you, the check or transfer comes from the sponsoring organization, usually with a note naming the donor who recommended it (unless they chose to stay anonymous).

Who gets the tax receipt

The donor's tax deduction comes from their gift into the fund, not from the grant to you. IRS Publication 526 says a donor can't deduct a contribution to a donor-advised fund without a contemporaneous written acknowledgment from the sponsoring organization that it has exclusive legal control over the assets. In other words, the donor's receipt comes from the sponsoring organization.

When you thank the donor who recommended the grant:

• Thank them warmly, by name, for recommending the grant, and say what it will do.
• Say the gift came from the fund, for example "your grant recommendation from [fund name]."
• Don't send a receipt for a tax deduction, and don't use language suggesting they can deduct it again.
• Acknowledge the sponsoring organization too, in the way it asks.

No benefits in return

DAF grants come with a strict rule. Under federal law (26 U.S.C. 4967), if a donor or advisor recommends a grant that gives them, or certain related people, a more than incidental benefit, a tax of 125 percent of that benefit applies to them, and a tax of 10 percent can apply to a fund manager who knowingly agreed.

The law doesn't list examples, so the safe course is not to let a DAF grant pay for anything the donor gets something back for, such as:

• gala tickets, dinner seats or event packages
• membership benefits
• raffle tickets or auction items

If a donor wants to use their fund to pay a pledge they made personally, ask them to check with the sponsoring organization first.

If a donor wants to come to your gala, they should pay for the ticket themselves and can recommend a separate DAF grant as a pure gift.

Qualified charitable distributions from IRAs

A qualified charitable distribution (QCD) is a gift made directly from an individual retirement account (IRA) to a charity. The IRS describes it as an otherwise taxable distribution from an IRA (other than an ongoing SEP or SIMPLE IRA), owned by someone who is age 70½ or over, paid directly from the IRA to a qualified charity.

Key points from the IRS:

• The annual limit. IRS Notice 2025-67 raised the total amount of QCDs a person can exclude from income from $108,000 to $111,000 for 2026. The limit is adjusted each year, so check the current figure.
• It must be paid directly. Publication 590-B says the distribution is made directly by the trustee of the IRA to the charity. A check made out to the donor that they then pass on isn't a QCD.
• It counts toward required withdrawals. The IRS says a QCD can satisfy all or part of the donor's required minimum distribution for the year.
• No double benefit. The IRS says a QCD that isn't included in income can't also be claimed as a charitable deduction.

Thanking an IRA donor

Publication 590-B says the donor must have the same kind of acknowledgment of the gift that they would need to claim a charitable deduction. For any single gift of $250 or more, the IRS lists what a written acknowledgment must include: your organization's name, the amount of a cash gift, and a statement that you provided no goods or services in return, or a description and good-faith estimate of what you did provide.

So for a QCD:

• Send a written acknowledgment with the amount, the date received, and a clear statement that no goods or services were given in return (if that's true).
• Name the donor, not the IRA custodian. The check often comes from the financial company with the donor's name in a note. If it isn't clear, call the custodian or the donor to confirm who it's from.
• Don't give benefits in return. A QCD should be a pure gift.

Our guide to donor acknowledgments covers the wording in detail.

Employer matching gifts and volunteer grants

Some employers match their employees' donations to charity, and some give grants to charities where their employees volunteer. Each company sets its own rules: which charities qualify, how much they match, how employees apply and by when. See the glossary entry for matching gift.

How to ask

• Mention it everywhere you ask: on your donation page, in thank-you letters and in year-end appeals. A short line works: "Does your employer match gifts? Ask your HR team. It could double your gift."
• Make it easy. Put your legal name, address and EIN on your website so donors and companies can find you.
• Ask volunteers too. Some employers give a grant when an employee volunteers a set number of hours. Ask volunteers to check, and keep accurate hour records so you can confirm them.
• Respond quickly when a company asks you to confirm a gift or volunteer hours.

Who to thank, and how

A matching gift comes from the company or its foundation, so it's that organization's gift. Thank the employee for setting the match in motion, and acknowledge the company's gift to the company, in the way it asks. The employee's own acknowledgment should cover only the amount they gave themselves. Keep the two records separate.

What to send for each

Checklist

• Our thank-you letters for DAF grants don't include tax receipt language
• We never offer tickets or other benefits in return for a DAF grant or QCD
• Our QCD acknowledgments name the donor, the amount and say no goods or services were given
• Our donation page mentions employer matching and gives our legal name and EIN
• We keep volunteer hour records accurate enough to confirm for employers
• We record matching gifts separately from the employee's own gift

To find more people who might give in these ways, see our guide to building a donor base. If you'd like advice from a charity that has done this, ask a member charity for help through the Exchange.

General information, not legal, tax or financial advice. Rules change and every situation is different, so check the official sources and talk to a qualified professional before you act.