Donor Advised Funds (DAFs) are the fastest-growing vehicle for Americans to set aside billions of dollars for supposedly charitable use. Currently, there are an estimated 285,000 DAFs with assets totaling around $85 billion. And, according to the Chronicle of Philanthropy, the rise of DAF giving has been “the most dramatic phenomenon in American charity” in the last decade. So how does a charity start to increase the number and size of gifts they are receiving through this valuable vehicle? There are three critical steps to take in your planning:
Promote giving by DAF
According to the Schwab Charitable Quarterly Report, the majority of DAF donors do research on nonprofit and third-party websites prior to giving. Prominent mention of DAF giving on your donation pages – even on your donation forms – cannot only drive giving through a DAF but may have the additional benefit of increasing the gift size over what you typically receive through the web using a credit card.
Articles and advertisements for DAF giving in your donor newsletters, particularly those targeted at mid-level donor audiences can be very effective. Profiling a donor who has elected to give through her DAF is a donor-centric method of promoting the ease of giving for this vehicle.
While no hard data is available on how much in DAFs deposits is “orphaned” each year when the individual donor dies, it is suspected that a lot of these deposits revert to the DAF upon the donor’s death. Organizations should promote this type of planned gift along with other alternative vehicles on their planned giving web pages and in promotional materials.
Make it easier to give by DAF
Promotion of DAF giving on your website is great, but getting donors who actually make the gift request and follow through can be challenging. A DAF “widget” placed directly on your page or form can alleviate this concern and keep donors focused on completing the gift. The widget essentially provides an embedded application that allows the donor to apply and complete – directly from your website – the gift request. The nation’s largest DAF, Fidelity Charitable, has a handy online resource to help guide you in building the widget into your digital marketing landscape. Find it here.
Recognize donors who have given through DAF
As a guideline, Fidelity Charitable reports that approximately 91% of their donors disclose their full contact information to be acknowledged. But most other DAF’s have much lower rates of donor disclosure. Therefore, it is less likely that the necessary reporting to the benefitting charities is happening and therefore that the charities are able to directly acknowledge and steward the gift. For those gifts that do have donor attribution information, it’s critical that timely acknowledgment of the gift occur – It’s not about the tax receipt for these DAF donors! – and that ongoing cultivation is designed and executed to pave the way to the next gift given through a donor-advised fund. Once your organization masters these three steps, you will begin to see more – and larger – gifts directed from DAFs.