How to Report Donor-Advised Fund Gifts on Schedule B for Nonprofits

When your auditor requests a list of donors who contributed over $5,000 last fiscal year—most likely for Schedule B of the IRS Form 990—it’s easy to get tripped up, especially with gifts routed through donor-advised funds (DAFs). Let’s walk through what’s happening, why the IRS asks for this, and, most of all, how your nonprofit should handle reporting DAF gifts so that you’re compliant and audit-proof (even when internal tracking isn’t where you want it to be).

1. The Big Picture: What Is Schedule B?

Schedule B is an “under-the-hood” schedule attached to Form 990, 990-EZ, or 990-PF, where nonprofits list out every donor (individual, business, foundation, DAF sponsor, or otherwise) whose gifts total $5,000 or more in a single fiscal year. The list isn’t made public for most nonprofits, but it is submitted to the IRS to help detect abuse and ensure donors’ tax deductions match up with what charities report.

Why Is This So Important?

• Preventing abuse: It helps ensure donors don’t double- or triple-count deductions or funnel them through complex structures.

• Accountability: It ensures organizations are being transparent with the IRS—even when donor privacy is preserved from the general public.

2. How the $5,000 Threshold and Aggregation Works

The $5,000 is per donor per fiscal year—not per donation. This means:

• If “Donor A” makes ten $600 gifts in the fiscal year, you do not list them.

• If “Donor B” gives $1,000 in January and $4,500 in December, you do list them.

• You aggregate all gifts from a single donor entity (ignoring individual gifts under $1,000 for the aggregation process).

3. Enter the DAF: Who Counts as “The Donor”?

Now, let’s address your main question: If several individuals recommend grants from Schwab Charitable (or any other DAF sponsor), is Schwab the donor—or are the individuals?

Short answer:
The DAF sponsor (e.g., Schwab Charitable, Fidelity Charitable, Vanguard Charitable, etc.) is considered the donor.
You aggregate all gifts from that DAF sponsor for the year—regardless of how many donor-advisors recommended them.
You list the DAF sponsor as the donor on Schedule B if their total gifts in your fiscal year exceed $5,000.

Example Scenario

Let’s use your numbers:

• 10 different donors each recommend $500 to your organization, all via Schwab Charitable during your fiscal year.

• The total amount received from Schwab: $5,000.

You report Schwab Charitable as a $5,000 donor on Schedule B, not the individuals who actually advised the gifts.
If each gift came from a different DAF sponsor, but all for $500, none would be reportable, since no individual sponsor’s aggregate gifts reached $5,000.

Key Details

• Even if you know the identities of the individuals who recommended grants, you do not list them on Schedule B; you report the DAF sponsor—the legal donor of record.

• In your internal CRM/fundraising system, you should track both the DAF sponsor (for compliance) and the original advisor, if disclosed (for stewardship and relationship-building), but only the DAF sponsor makes it onto Schedule B.

Why? The IRS treats the grant from the sponsoring organization as the actual “gift” to your nonprofit; the donor retains advisory privileges only and doesn’t “own” the money anymore.

4. How to List DAF Donations on Schedule B

Schedule B requires you to:

• List the DAF sponsor’s name and address as the donor.

• Enter the total amount received from that sponsor during the fiscal year.

• Describe the contribution (e.g., “cash,” if applicable), just as you would for another entity.

• Group everything from Schwab, everything from Fidelity, etc., together—do not split by original advisor.

What About Acknowledgement Letters?

• Thank-you letters: You may thank both the DAF and the advisor, but official IRS receipts go to the DAF sponsor only.

• Do not send a tax acknowledgment stating a deductible contribution to the individual advisor—the DAF sponsor has already issued them a deduction when they contributed to the DAF, not when the DAF grants to your nonprofit.

• You may thank the original advisor for recommending the grant from their fund (“Thank you for recommending a grant from your Schwab Charitable Donor-Advised Fund!”), but there’s no valid nonprofit receipt for their taxes.

5. What If the Database Doesn’t Track DAFs Properly?

This is a common challenge for nonprofits, especially those that started tracking donors before DAF gifts became the new normal. Problems arise when:

• Gifts from the DAF are entered under the original donor’s name, not the DAF sponsor, creating compliance risk.

• Reporting gets muddled because the true legal donor is missing, or your database can’t easily aggregate by DAF sponsor.

If you’re not already tracking DAF sponsors as unique donor entities, now is the time to start.

How Holdings Can Help

• Automatic Segmentation: Holdings’ virtual accounts allow you to automatically segment incoming gifts by DAF sponsor, grant, fund, or any other attribute—no spreadsheets needed.

• Integrations: If you use QuickBooks, Sage Intacct, or another accounting system, Holdings plays nicely with what you have—download aggregate DAF transactions with sponsor-level detail, ready for reporting.

• Catch-Up Bookkeeping: Understaffed? Our bookkeeping service can help you reorganize historical data to accurately reflect DAF vs. individual gifts so your next Schedule B is accurate and audit-ready.

6. “What If My Advancement Director Still Doesn’t Get It?”

You’re not alone! Here’s why DAFs can be so confusing:

• DAFs have exploded in popularity, and database systems (and staff training) haven’t always kept up.

• Old habits die hard: Many fundraisers are trained to focus on relationships with people, not legal entities.

• DAF advisors’ identities aren’t always disclosed to the nonprofits, making stewardship and cultivation tracking tricky—but IRS compliance remains non-negotiable.

Triage Tips for Now

• For this year’s Schedule B:

  • Aggregate all gifts from each DAF sponsor separately.

  • Pull the legal donor information from gift processing records or bank statements—don’t use your soft-credit/constituent history unless it matches up.

• For better long-term tracking:

  • If you know (or can find) the original advisor, link them in your fundraising CRM for stewardship—but do not substitute them for the DAF sponsor in compliance reporting.

  • Train your team: “If the money came from Schwab Charitable, it’s Schwab that goes on the IRS schedule. Always.”

7. Special Situations and Grey Areas

A few quirky scenarios can come up:

Anonymous DAF Grants

If the DAF sponsor doesn’t disclose the original advisor and simply labels the grant “anonymous,” you still list the DAF sponsor as the donor (unless another sponsor meets the aggregation threshold).

Related DAF Grants (Family, Board, etc.)

Even if you know that multiple DAF grants all come from family members or board, do not attempt to aggregate across different DAF sponsors. Only aggregate by the same legal DAF sponsor.

Multiple DAFs at the Same Sponsor

If you receive several grants from different accounts within Fidelity Charitable, you do aggregate all of them for Schedule B under “Fidelity Charitable”—not by underlying account or individual.

Non-DAF Intermediaries

If a private foundation, family foundation, or other entity makes a grant, the rules are a little different—these are generally reported under their own name as well. But don’t treat private foundations and DAFs the same when calculating your public support or Schedule B.

8. Common Mistakes and How to Prevent Them

• Reporting by original advisor instead of DAF sponsor: Not only is this incorrect, but it could trigger IRS questions.

• Missing DAFs because gifts are hidden in “individual” records: This leaves you open to audit risk.

• Under- or over-reporting due to messy aggregation: Always double-check the total gifts credited to each sponsor for the fiscal year.

Solution: Clean up your donor database, and use modern platforms—like Holdings—that make accurate segmentation, tracking, and reporting easier.

9. Compliance Checklist for Your Auditor

When your auditor is ready to review, you should be able to pull:

1. A list of all contributions, sorted by donor entity—including DAF sponsors.

2. Aggregated totals by sponsor: Each DAF sponsor’s total gifts for the fiscal year.

3. Documentation matching your CRM and bank records: For each DAF sponsor over $5,000, you have supporting docs showing date, amount, and payor/sponsor.

4. Schedule B draft: Showing DAF sponsor name, address, and aggregate amount, for all sponsors exceeding $5,000.

10. Common Q&A

Q: If three individuals each send $2,000 from their Schwab Charitable accounts, do I have a $6,000 Schwab donor for Schedule B?
A: Absolutely. Schwab Charitable is the “donor” for IRS purposes. You’d list Schwab, with a contribution of $6,000. You do not break it out by advisor.

Q: What if I get $4,000 from Schwab and $4,000 from Fidelity?
A: Neither needs to be listed (assuming neither aggregate is over $5,000), unless another DAF sponsor or donor crosses the threshold.

Q: The DAF gift is marked “anonymous.” How do I report this?
A: You still list the DAF sponsor as the donor, with “anonymous” only if you truly don’t know who the donor is and it’s not from a DAF.

Q: If a check arrives from “The Jones Family Fund at Schwab Charitable,” do I list “The Jones Family Fund” or “Schwab Charitable”?
A: You list Schwab Charitable—while the fund name may be attached, the legal donor is Schwab.

11. Holdings Makes This Whole Thing Easier

• Virtual Accounts: Segment cash by fund, grant, or donor entity—no more spreadsheet hacks!

• Bookkeeping Services: Get help right-sizing your books and catching up if you’re understaffed.

• Integrations: Connect with your existing finance tools, or manage it all-in-one place if you prefer.

• Audit Readiness: Stay prepared whether you run on QuickBooks, Sage Intacct, or something else—track what matters for compliance and stewardship, not just for fundraising bragging rights.

Wrap Up

• For IRS Schedule B, report DAF gifts under the name of the DAF sponsor, not the original advisor.

• Aggregate all grants from each DAF sponsor in the fiscal year; list any that total over $5,000.

• Update your systems now, if needed, to properly track DAFs versus individual gifts.

• Use modern banking and expense tools—like Holdings—that automate segmentation, simplify aggregation, and keep your org out of spreadsheet chaos.

• Train your team: Compliance comes first—but relationship building with advisors also matters. Steward both, but label them right.

If your Advancement Director is stumped or your auditor’s on vacation, you’ve got this! And if you need a friendlier system (or a cleanup partner), Holdings is here to help you keep things clear, compliant, and funder-ready.

If you need help getting your donor list by DAF sponsor out of Holdings, QuickBooks, or whatever system you use, or you’re ready to finally segment and sort your cash without spreadsheets, just ask. Your compliance (and your sanity) matter!