The 29-year-old made the announcement on Instagram and Twitter on Monday.
According to him, only government-approved orphanages are qualified to apply for the fund.
Davido raised N200million from friends and fans after asking them to send him money in a social media post on Wednesday, November 17.
He added his N50million to bring the total amount raised to N250million.
In a statement released on Saturday, November 20, the eve of his birthday, Davido said he would give all the money to orphanages across Nigeria.