Which statement best describes a donor-advised fund (DAF) in comparison to a private foundation?

Which statement best describes a donor-advised fund (DAF) in comparison to a private foundation?

• A. A DAF is sponsor-managed with donor recommendations; a private foundation has more control, governance requirements, and ongoing costs.
• B. A DAFrequires annual independent grants while private foundations do not.
• C. A DAF distribution to charity is mandatory every year; private foundations can accumulate funds tax-free.
• D. A DAF is tax-exempt, but private foundations are taxable entities.

Answer: (A)