Donor-advised funds have exponentially grown in popularity over the past decade. A donor-advised fund (DAF) enables a donor to give an asset, receive an immediate tax deduction, and recommend grants at their own pace to their favorite charities. The popularity is due in large part to people using them as checking accounts for their charitable contributions.

Christians often use these funds also because they are able to accept more types of gifts than their churches are able to receive, such as stock, real estate, and business equity. Moreover, DAFs enable Christians to schedule their giving and give anonymously. These funds are easily accessible and centralize all charitable giving into single online accounts.

According to the National Philanthropic Trust, there are 995 organizations sponsoring donor-advised funds. The PCA Foundation is one such organization. But when Christians open DAFs, they are often unaware that each sponsoring organization sets parameters for the types of organizations to which it will grant.

The largest donor-advised fund sponsor is Fidelity Charitable Gift Fund. As the nation’s largest grantmaker, Fidelity is under increasing pressure to eliminate grants to any organization that refuses to support LGBT causes. As cultural headwinds shift, Christians have no guaranteed protections that they will be able to recommend grants from their Fidelity DAFs to their churches and ministries.

A recent report from the 1792 Exchange classified Fidelity Charitable as a Medium Risk company. The Spotlight Report takes publicly available information to examine a company’s “policies, practices, and other relevant criteria to determine the likelihood a company will cancel a contract or client, or boycott, divest, or deny services based on views or beliefs.” Similarly, Schwab Charitable Fund, the second largest donor-advised fund sponsor, was labeled as a Medium Risk due to its refusal to grant to some Christian organizations that were identified as a hate group by the Southern Poverty Law Center.

It is important for Christians to understand that their charitable assets can be restricted by the DAF sponsoring organization. By the nature of a donor-advised fund, once you make a donation, the assets no longer belong to you but to the sponsoring organization.  (You can confirm this by looking at the receipt you receive from the DAF sponsor for contributions you make to your DAF.)  As a result, the sponsoring organization is not bound to return your assets to you or transfer them elsewhere. They retain full rights as to the disposition of the gifts you donated.

For these reasons and more, it is important for Christians to make sure they use a donor-advised fund that aligns with their biblical values. At the PCA Foundation, we have bylaws that prevent us from distributing grants to organizations whose values and practices are not aligned with Scripture. Every year, we have to refuse grant recommendations because the benefitting organizations have beliefs or practices that contradict God’s Word.

It is exciting to see the increased generosity among Christians. Our hope and prayer is to see more assets deployed to churches and ministries that are committed to Scripture and the advancement of Christ’s Kingdom.