The recent Medtronic acquisition of Covidien not only lowered the company’s corporate tax rate, but also created a tax headache for longtime Medtronic shareholders — and a local miniboom in an increasingly popular type of family charity.

In 2014, $4.8 million worth of Medtronic stock found its way into 58 donor-advised funds (DAFs) at the Minneapolis Foundation, including 18 newly established funds, according to Bill Sternberg, vice president of philanthropic services there. The Medtronic deal only added to an already healthy surge at the foundation, which saw contributions into DAFs jump 185 percent last year to $84.7 million. DAFs make up 45 percent of total assets and 70 percent of all charitable grants from the Foundation.

DAFs are a lower-cost and simpler “charitable bucket” than a family foundation, allowing an individual, family or organization to take an immediate tax deduction, invest assets that can grow over time and use the fund for future charitable grants. First established more than 80 years ago, DAFs didn’t really take off until Fidelity set up a nonprofit arm to house DAFs and began educating the public 25 years ago. They are the fastest growing category of charitable organization in the U.S. — and are as individual as the families that set them up.

After Bill Gullickson and his three brothers sold their majority stake in the family-owned pest control business, MGK Co., to Sumitomo Chemical in late 2012, their aging mother encouraged them to set up a charitable entity involving “the whole family.” Counting spouses and children, that meant 19 individuals across three generations ranging in age from 15 to 86 would be deciding charitable donations.

While “wanting to do something in the community,” Gullickson realized the family lacked the expertise needed to set up and run a family foundation. So they set up a donor-advised fund. “For my family, it’s an educational process,” he explained.

Setting up the fund lets them learn about running a foundation while getting started with their charitable activity. His mother, the fund’s “guiding light,” is less interested in “wasting time learning stuff” about organizing a foundation than in involving her family in supporting the community. While they’ve not made any grants yet, they are planning a family get together this summer to start the process.

After “very conscientious planning and saving,” Paula Roe retired from Wells Fargo as a senior vice president of compensation and benefits holding Wells Fargo stock that had grown substantially in value.

Recognizing their good fortune and feeling “a responsibility to do some good,” last summer the couple used some of the appreciated stock to finance a donor-advised fund, making charitable giving “more planful, a little less random,” Roe explained. With their two adult daughters educated and independent and a new grandchild, she and her trial attorney husband, Roger, felt they had “accomplished what’s important to us.” That in turn allowed them to “accept a feeling of security,” she said. She also sees the fund as a way to promote her values through example to her children.

The Roe and Gullickson family funds joined more than 217,000 other donor-advised funds currently in existence, up more than one-third since 2007. Nationwide, donor advised funds (DAFs) attracted a record $17.3 billion in donations in 2013 (the most recent data available), up more than 23 percent from 2012, according to the National Philanthropic Trust. Those donations represented more than 5 percent of total charitable contributions across all categories of giving and grants to charities out of donor advised funds approached $10 billion, also a record, maintaining the seven year average payout above 20 percent of fund assets.

While the average size of a DAF, at nearly $250,000 sounds large for many families, funds can be set up for as little as $5,000 through the nonprofit arm of a financial sponsor such as Fidelity or Schwab, which along with Vanguard, dominate the field. Minneapolis Foundation’s Sternberg says a community foundation offers fund sponsors more “insight and advice” than Fidelity, enabling fund sponsors to learn from one another and pool grants around shared interests — advantages cited by both Roe and Gullickson who chose the Foundation to house their funds.

Jon Crow, senior client adviser at Meristem Family Wealth Management in Minnetonka, sees the growth in DAFs primarily driven by demographics. Many affluent clients “feel they’ve done enough for their kids and grandkids and want to give the rest away,” he observed. While some clients in their 60s and 70s are still balancing financial needs in retirement with their philanthropic impulses, those in their 80s are “very aggressive” in charitable planning.