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Writer's pictureMitch Stein

7 practical steps to improve the nonprofit experience with DAF giving

Recapping the Nonprofit & DAF roundtable at the 2024 DAF Giving Summit, hosted by Chariot





Last week, Chariot attended the third annual DAF Giving Summit for the third year in a row and gained tremendous insight from the DAF sponsors, technology providers, wealth advisors and nonprofits that attend. 


As the interest in and activity around Donor Advised Funds continues to grow at an exponential rate, attendance at the Giving Summit has followed suit. This year, there were over 400 people in attendance - a 2x increase from its first year!

Chariot also had the privilege of hosting a breakfast roundtable discussion on digital DAF giving. What unfolded was a phenomenal conversation between nonprofit leaders and DAF sponsors as folks shared openly and productively ideated on steps everyone can take to improve the DAF giving experience. 






First, nonprofit fundraisers in the room - the Wounded Warrior Project, Planned Parenthood, MIT, etc. - walked through the biggest challenges they face operationally with the explosion in DAF giving: 




Top Nonprofit Operational Challenges with DAF Giving


  • Database Limitations: Nonprofits’ systems aren’t set up for proper recording of DAF gifts. Most organizations are using tools built 10+ years ago to track their donor data, so they have had to use workaround solutions to properly track things like Hard Credits, Soft Credits, and Fund Names that are specific to DAFs. The patchwork solutions are no longer sufficient as DAF giving has exploded. 3 of the attendees shared that within their mid-level giving programs, 40-80% of their donors are using DAFs.  

  • Anonymous Gifts: The prevalence of anonymous gifts and, more often, gifts without any usable information (i.e. they only have a fund name that doesn’t identify the donor clearly), remains a significant burden to proper record keeping. Teams struggle to tie DAF gifts to a specific donor record and thank them properly.  

  • Delayed Stewardship: the fact that nonprofits don’t know about a gift until it arrives, which can take weeks for most DAFs, puts significant time between when a donor makes a gift and hears from the organization - if they hear from them at all. Donors often complain about this delay in acknowledgement.  

  • Gifts Going to the Wrong Organization: There were several experiences shared of donors selecting the wrong organization in their DAF portal because many have similar names. Folks also mentioned some difficulty in updating or supplementing data about their organization in the databases that DAFs are referencing (i.e. adding a secondary address for the org’s headquarters as well as that of their gift processing PO Box which can give donors pause when submitting grant requests).

  • Difficulty Segmenting & Communicating: Many folks mentioned how difficult it is to know the way that DAF donors prefer being contacted. Since they go into their DAF portal to submit gifts, it’s nearly impossible to tie that action to a specific mailer, email or advertisement. The receipt of gift is disconnected from the method of solicitation, which is how all other donor communication works for a nonprofit.


Many nonprofits noted how Chariot’s solution DAFpay helps address these challenges by offering a 3-click DAF payment option that can be embedded into donation forms and captures DAF donor name & email immediately.





Even with DAFpay, many DAF donors do still continue to make gifts directly through their portal, which leads to the challenges detailed above. Luckily, many of the DAF providers in the room - like United Charitable, Jewish Federations of North America, Ren, The Dallas Foundation, etc.  - offered incredibly helpful suggestions to improve engagement with DAF donors.





Advice for nonprofits on better DAF engagement 


  1. Make your EIN easy to find 


Your EIN is the best way for a donor to look up your organization in their portal and not confuse organizations with similar names. Make it easy to find on your website (the homepage footer, about us page and DAF page in your ways to give section are a must). It’s also helpful to include your EIN in any solicitation to DAF donors.   


  1. Sign up for Electronic Payments 


Many DAF providers do now offer the option to receive gifts as an Electronic Funds Transfer (EFT) if an organization adds their account & routing number to the system. This allows payments to be received much faster so stewardship can start sooner.


  1. Personalize Acknowledgements 


Many organizations reach out to DAFs when they can’t identify the donor behind a DAF gift seeking more information. If the DAF is unable to share more information, they do often pass an acknowledgement on to the donor - especially if it’s clear that it is personalized and not a template.

 

  1. Tell Donors to Use the Memo Line


Whenever soliciting DAF donors specifically, encouraging them to provide as much detail as possible on their grant recommendation in the memo line is helpful to the recipient nonprofit and the DAF provider to diligence more quickly.


  1. Share the DAF Fundraising Report with your team


The 2024 DAF Fundraising Report contains a long list of best practices for DAF donor data that will help any nonprofit align their internal team around a consistent method for DAF gift tracking.




 

  1. Try Segmenting Communications by the DAF used 


In an effort to fine-tune the best communication style for DAF donors, folks discussed how the specific DAF provider a donor is using can indicate a lot about their behavior and preferences. 


97% of Fidelity donors are making recommendations through their portal online - so trying more email communication with this largely “online” donor segment might be effective. Since Daffy had the first DAF mobile app, many of their DAF donors are giving through their phone - try targeted SMS communication for this segment. Many smaller community foundation DAF holders are still calling their grant requests in - try more direct mail with this audience. 


Understanding these differences can help you tailor outreach - and establish a baseline to experiment from.

 

  1. Reach out!


DAFs, especially smaller or regional ones, want nonprofits to come to them. They appreciate building relationships with organizations and better understanding their work, and can then also make sure the organization’s information is correct in their system. 


While DAF administrators generally don’t make specific recommendations to DAF account holders, if they receive questions about specific cause areas, it is helpful to have some relevant organizations top of mind.


 

To stay up to date on all the latest DAF research and news, subscribe to the Chariot monthly newsletter and follow us on LinkedIn.   







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