Start-up & Maintenance Cost

Donors can begin donor-advised funds (DAFs) swiftly at a low cost; charitable sponsors just need the donors to complete an application and make an initial donation. Minimum donations required for DAFs can start from $5,000 to $25,000. This can stand in great contrast to private foundations' beginning contributions. While there isn't an exact minimum required, foundations historically have much greater initiation (usually above $100,000) due to their apparent commitment. Private foundations also incur legal fees in addition to filing fees, which can amount to thousands of dollars, plus the time (usually several months) from the beginning of the process until the reception of the IRS determination letter.

However, once private foundations have been started, the maintenance cost and time invested for ongoing operations begin to taper with the experience accumulated. If this is a significant factor, the DAF favors donors looking to save on time and money. While the private foundation may be more demanding with the time and financial commitment, they offer benefits that some individuals find offsetting.

https://www.nptrust.org/donor-advised-funds/daf-vs-foundation/