The Rockefellers. The Waltons. The Pulitzers. The Fords. These are the well-known families that a legacy through the empires they built. But they also left a lasting legacy through the many causes and organizations that still thrive today due to decades of philanthropy.

Many funded their philanthropic endeavors by establishing private family foundations. And while private charities remain a popular option, a growing number of high-net-worth (HNW) and ultra-high-net-worth (UHNW) families are turning to donor-advised funds (DAFs) to maintain their family tradition of philanthropy.

“DAFs are a hot topic among the families we work with,” says Cathy Walker, director of Trust and Philanthropic Solutions at RBC Wealth Management–U.S. “They are emerging as a more flexible and lower-maintenance option for families who want to give back over time.”

According to 2026 data from the DAF Research Collaborative, contributions to DAFs totaled $90.57 billion in 2024, and grants from DAFs to charitable organizations totaled $64.6 billion.

As easy as 1, 2, 3 

What makes a DAF so popular? Walker suggests it’s due in large part to the flexibility it offers, and the ease with which an individual, family or business can establish a fund.

To create a DAF, an individual must work with a “parent organization,” such as a community foundation or another qualified 501(c)(3) non-profit organization that essentially acts as the administrator of the fund over the fund’s lifetime.

The parent organization handles the set-up, the accounting, the investment management of the assets and the vetting of the individual nonprofit organizations to which the donor wishes to recommend their grants. Some DAF providers will also work with the donor’s financial advisor on asset management. But administration isn’t their only role.

“We help families who establish DAFs articulate their charitable goals, and then realize those goals by supporting organizations that align with their core family values,” Walker says.

There are typically no start-up costs associated with a DAF, beyond the individual’s initial contribution to the fund. The parent organization will charge an annual administration fee to the DAF, usually based on a percentage of assets held.

Then there is the question of what assets an individual or family should contribute to the DAF. Many wealthy families make contributions of cash—perhaps proceeds from the sale of a business or another large asset sale, Walker says. But appreciated securities and real estate are also popular funding sources, and may offer potential tax benefits.

Flexibility in giving

In addition to the potential tax benefits, DAFs afford donors flexibility in how they want to give back. Walker points to a client who, a few years ago, wanted to contribute to the work of a researcher who was exploring a rare genetic anomaly that his own grandfather had died from.

“His initial hope was to give a large, one-time gift to the hospital where the researcher was conducting his work,” Walker recalls. “Just before he wrote the check, I asked him to consider setting up a DAF that would allow him to make multiple smaller contributions to the hospital over the course of several years.”

The last-minute change of strategy turned out to be fateful for the donor. Less than a year later, the researcher moved to a different hospital.

“Had he proceeded with the lump-sum gift to the hospital, he would have locked himself into funding the institution—instead of the research that was so near and dear to his heart,” Walker says. “With a DAF, he was able to recommend grants to the new institution where the researcher was continuing his work.”

Intergenerational philanthropy

DAFs also offer families an easy way to get future generations involved in philanthropy.

The matriarch of one family Walker worked with established a DAF not only to realize her charitable giving goals, but also to teach her grandchildren about philanthropy.

Each year, she would ask her five grandchildren to help allocate some of the money in her fund. But she didn’t allow them to pick their charity at random. Instead, she required each grandchild to give a formal presentation, making the case for their charity.

“She encouraged them not only to consider the charity’s mission, but also how it was run and how it spends its money,” Walker says. “Essentially, she was preparing them to take a more active role in directing grant activity from the fund in the future.”

Determining how the next generation will uphold a family’s philanthropic legacy is a nuanced conversation that begins before charitable structures are even considered. But, it’s often the case that a DAF is part of the ultimate plan. Indeed, a DAF can be a great intergenerational charitable wealth transfer vehicle. The key is to have your financial advisor, tax advisor, legal advisor and philanthropic advisor—along with your kids and grandkids—all take part in the discussion.