In a rapidly changing fundraising landscape, one trend is too big to ignore: Donor-Advised Funds (DAFs). If you’re a social impact leader looking to future-proof your fundraising strategy, DAFs need to become your newest trend.
What are Donor-Advised Funds (DAFs)?
In short, DAFs are investment accounts donors use to make charitable contributions over time. Donors have many choices of how to contribute, using cash, stock, or other assets. When they give, they receive an immediate tax deduction, and then they can give recommendations as to where they want their grants to go, to one or more of their favorite nonprofits.
Why are they so popular?
The key is DAF’s flexibility and simplicity. DAFs combine the tax advantages of giving with the ease of giving digitally. Donors can plan their philanthropic gifts like they manage a portfolio.
Quick Stats:
-Nearly 20% of all charitable donations now come through DAFs.
-In 2024 alone, DAFs distributed $65 billion in grants.
-More than $326 billion is currently held in DAF accounts.
-DAF gifts are on average 10 times larger than gifts made via credit card.
That means one in five charitable dollars, around 20%, is already flowing through DAFs.
Steps to take to initiate a DAF strategy:
- Demystify DAFs. They shouldn’t be seen as “only for the elite” givers. They should be seen as an everyday part of your organization’s fundraising mix.
- Educate your entire team about what DAFs are and how they work.
- Add DAF giving options to your website, donation pages, and printed materials.
- Integrate DAF messaging into all of your marketing, any existing campaigns as well as upcoming fundraising asks.
- Host or participate in “DAF Day” to highlight this giving method and engage your donor base.
Want more information?
I sat down with Mitch Stein, in a recent episode of my podcast, The Nonprofit Leadership Podcast. Mitch is the Head of Strategy at Chariot, and he shares all about the explosive growth of DAFs and what it means for you as a nonprofit leader when it comes to navigating economic uncertainty and shifting donor behavior.
You can listen to the whole conversation here.