Donor-advised funds save taxes but have risks, lawsuit reveals
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By Medora Lee
Published on March 11, 2026.
Donor-advised funds, or DAFs, are like a charitable investment accounts that allow donors to contribute cash, securities, or other assets to the DAF without having to make distributions to charities. The funds can be invested for tax-free growth until donors are ready to make a donation. However, financial advisers warn that these funds may not be fully protected if donors give up 100% control over the funds. A lawsuit was filed against the nonprofit Christian Community Foundation, also known as WaterStone, over the family's DAF set up by his late father, alleging that WaterStone has refused to communicate with him and has failed to make charitable grants that he has recommended since early 2024. WaterStone declined to comment further on the pending litigation. The case may not fall into any categories of disputes.
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