Setting Up a Memorial Fund: Options, Taxes and Steps

A memorial fund is money collected in someone's name, either to help their family with costs or to support something they cared about. You can start one in minutes with a crowdfunding page, or take a few weeks to set up a scholarship through a community foundation. The main choice is who the money is for, because that decides the platform, the tax treatment and what you tell donors.

What are your memorial fund options?

There are four common routes. Each suits a different goal.

A fund for a family's costs and a fund for a cause can sit side by side. Many families use a crowdfunding page for the funeral and ask friends to give to a charity for everything after that. Our guides to crowdfunding funeral costs and fundraising platforms compare the sites.

Are donations to a memorial fund tax-deductible?

It depends on the recipient, not on the word "memorial."

The IRS says only qualified organizations can receive tax-deductible contributions, and its Publication 526 states that you cannot deduct contributions to specific individuals. So a gift to a family's funeral fundraiser is a personal gift with no deduction. A gift to a registered charity in the person's name can be deductible. Anyone can look up a charity in the IRS Tax Exempt Organization Search to confirm.

Beginning with tax year 2026, taxpayers who do not itemize can deduct up to $1,000 ($2,000 if filing jointly) of cash gifts to certain qualified organizations, according to the IRS. That makes small gifts to a charity more worthwhile for donors who take the standard deduction. Publication 526 explains which organizations qualify.

A donor-advised fund is an account held by a sponsoring 501(c)(3) charity. The donor gives to the fund, then advises on grants, but the charity holds legal control. It suits someone making larger gifts over time, not a small family fund. If you do not itemize, ask a tax professional how a gift to a donor-advised fund is treated.

Will the family owe tax on the money?

Personal gifts are generally not income to the person receiving them, and the IRS says a gift does not ordinarily affect the recipient's federal income tax. The giver, not the recipient, is generally responsible for any gift tax, and the annual exclusion is $19,000 per recipient in both 2025 and 2026. Few individual donors give that much to a memorial fund.

You may still hear about a $600 threshold for payment apps. The IRS page on Form 1099-K says platforms report payments for goods or services when they exceed $20,000 in more than 200 transactions. It also says money you receive from friends and family as a gift should not be reported on a Form 1099-K. If you get a form that seems wrong, contact the platform and keep your records.

Tax treatment depends on the facts. If the fund is large, mixes several purposes, or pays anyone for work, talk to a tax professional.

How do you set up a memorial fund, step by step?

1. Decide the purpose. Write one sentence: "This fund helps pay for Maria's funeral," or "This fund supports the local animal shelter in Maria's name." Get the family's agreement, even if you are a friend organizing it.
2. Choose the route. Use the table above. For funeral costs, a crowdfunding page is usually the fastest. For a lasting cause, contact a charity or community foundation.
3. Pick who holds the money. A crowdfunding payout goes to a named person's bank account. Choose someone the family trusts, and keep the money separate from personal spending.
4. Write a clear page. Give a short, honest story, the goal and exactly what the money will cover. Add what happens to any surplus.
5. Share it. Post the link in the obituary, on the funeral home's tribute page and in messages to close friends. Our guide to funeral donation etiquette covers how to word the request.
6. Keep records and update donors. Save receipts. Post an update once the bills are paid or the first grant is made.

What does a crowdfunding page cost?

GoFundMe's US pricing page says there is no fee to start or manage a fundraiser. It charges 2.9% plus $0.30 per donation for individuals, and 2.2% plus $0.30 for certified nonprofits. Donors can add an optional tip. At those rates, a $100 gift reaches the fundraiser as $96.80. Other platforms set their own fees, and rates change, so check the current pricing page before you launch.

How do you set up a memorial scholarship or a named fund?

Most families do not need their own nonprofit. Starting a 501(c)(3) means applying to the IRS through Form 1023, which must be filed electronically on Pay.gov, and then running the organization. Smaller groups may qualify for the shorter Form 1023-EZ, after completing an IRS eligibility worksheet. Eligibility rules can change, so check the IRS page first.

An easier path is to ask a community foundation, a school's foundation or a charity you already trust. They hold the money, handle receipts and tax reporting, and often manage the selection process for a scholarship. Minimum gifts, fees and how long setup takes vary, so ask each one. The Council on Foundations has a community foundation locator. See our guide to setting up a memorial scholarship for the decisions involved.

How do you keep a memorial fund trustworthy?

Charity scams follow every public death, so clarity helps donors feel safe.

• Name the purpose and the person in charge. Put the organizer's name on the page.
• Use a real charity for charitable gifts. Confirm the organization in the IRS search before promoting it.
• Do not overshoot the goal. Start with the funeral bill, then raise the goal or redirect extra money as you said you would.
• Account for the money. A short update showing the receipt, the headstone or the donation builds trust.

What to do next

1. Talk to the family about what they want the fund to do.
2. Compare a crowdfunding page with a tribute gift to a charity, using our guide to who pays for a funeral if costs are the driver.
3. If the family needs help with bills now, see government funeral help and what to do if you cannot afford a funeral.
4. For a lasting online tribute to go with the fund, see memorial website builders.