DAFs – Your Donor’s Charitable Checking Account

Donor-advised funds (DAFs) are fast-growing charitable giving vehicles since they are an easy way to give to charities. The donor doesn’t need to manage their account, gets an immediate tax deduction at the time of their DAF creation, and the funds in a DAF grow tax free.

DAF accounts are growing in number and dollars every year. There are more than 1.5 million DAF accounts in the US as of 2023, up 20% since 2021, with over $250 billion dollars sitting in these DAFs. That is an almost seven percent increase from the 2023 total of $234 billion in DAFs; and both accounts and dollars are growing every year.

Among the national DAF sponsors (like Fidelity, Vanguard, TIAA or Schwab) they hold approximately $175 billion dollars in DAF assets; with the average DAF grant around $4,798, so ask for a DAF gift!

A challenge organizations receiving DAFs face is that roughly 10% of DAF grants may only provide a name with a check, and sometimes the name provided is the DAF account name and not the actual donor’s name; another 8% share name and address, so how do we know who our DAF donors are?

This same challenge also provides us with opportunities. First, do some research.  Do the DAF custodians sending the checks have portals organizations have access to like Fidelity? So, the next question is who in your organization has this access and will they share the information with you? Then work with your cash receipting folks to set up a notification process so that you can research DAF gifts and correctly identify donors as they come in.

Next, we should use every channel available to educate our donors about DAFs and ask for a DAF. Let donors know you accept DAFs and how they may give you one; consider mailing a postcard to your full file with a link to an information page.

Ask them to give a DAF and to let us know where their DAF is coming from so that we may thank them appropriately. We should also use all channels available to acknowledge that they gave a DAF once we know they did and encourage them to give in this fashion again.

Make it easy for your donors to give a DAF. Consider the tools out there that will help like widgets (Free Will, Give Butter, Givechariot, DAF Direct).

Last, but not least, partnerships matter. We should consider the relationships we make with colleagues in this field like brokers, financial advisors and within our industry.

 

Guest blog by: Maria Fisher. Maria is a Membership Campaign Manager for The Nature Conservancy and may be reached at mfisher@tnc.org.