Donor Advised Funds Are Changing Fundraising — Is Your Organization Ready?
Donor Advised Funds (DAFs) are no longer a niche giving tool used by a small segment of wealthy donors. They have become one of the fastest-growing vehicles in philanthropy, holding hundreds of billions of dollars earmarked for charitable giving. More importantly for nonprofits, donors are increasingly using DAFs for annual support, campaign gifts, and major contributions.
If your organization wants to compete for DAF dollars, here are a few practical steps to take:
1. Stop Treating DAF Gifts as Anonymous
Many nonprofits assume DAF gifts are anonymous and difficult to track. In reality, most DAF grants include donor information somewhere in the paperwork, email, or grant notification. Your development team should carefully review every DAF gift and make every effort to identify and properly steward the donor behind it.
2. Flag DAF Donors in Your Database
A donor using a DAF is often a sign of philanthropic sophistication and charitable capacity. Even if the current gift is modest, it may indicate a donor capable of significantly larger support. Organizations should track DAF donors separately and segment them for more intentional cultivation.
3. Train Your Staff and Volunteers
Many board members and even frontline fundraisers still do not fully understand how DAFs work. That creates missed opportunities. Your team should know:
• How DAFs function
• How donors recommend grants
• Why donors use them
• How DAFs fit into tax and estate planning conversations
A fundraiser who understands DAFs will have more confident and productive conversations with donors.
4. Make It Simple for Donors to Give Through Their DAF
If someone wants to give through a Donor Advised Fund, your organization should make the process easy and clear. Your website should mention that you accept DAF gifts and explain how donors can recommend a grant. The easier you make it, the more likely donors are to follow through with the gift.
5. Remember: DAF Donors Are Still Donors
A Donor Advised Fund is just the tool a donor uses to give. The real key is still building relationships. Donors want to feel connected to your mission, understand their impact, and trust your organization. The nonprofits that build strong relationships with DAF donors will be the ones most successful in attracting future gifts.
