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  • Writer's pictureDrew Schneider

Answering Fundraisers’ Burning Questions on Donor Advised Funds

We joined AFP’s New York City chapter last week to help answer nonprofit fundraisers’ biggest questions around DAFs. Here’s what we shared.


Elon Packin, Chariot’s Head of Partnerships, was invited to join Robert Wahlers (President of Peak Philanthropic) and Monique Fournillier (Grant Manager for Habitat for Humanity New York City and Westchester County) to discuss all things Donor Advised Funds with a packed house of nonprofit leaders from the greater NYC area. 


Elon and Robert were asked to provide their expertise to shed some light on top questions from a very curious audience. The 5 topics they spent the most time discussing are below:  


 

1. How exactly do we ask for DAF gifts? 


Many nonprofit fundraisers are uncomfortable asking for donors if they have a Donor Advised Fund or prefer to use a DAF to give because they are worried they don’t know enough about how DAFs work. It’s critical that fundraising teams are getting adequate education so they have plenty of confidence to raise the topic of DAFs with any donor. Here is one great resource to learn how individuals decide to open and use a DAF for their philanthropy. You can also subscribe to Chariot’s monthly newsletter where we share all of our latest educational resources. 


After you’ve gotten up to speed, the best thing to do is just start raising the topic of DAFs wherever you can. It’s proven that nonprofits receive 2.2x more DAF gifts when they ask for them, so there’s no reason to be afraid. Over 3 million people are using this vehicle to donate $52 billion a year so don’t wait to start talking about it with people! 


Easy ways to bring up DAFs include:

  • In any 1x1 conversation where a donor is discussing the different ways to give, be sure Donor Advised Funds are a core part of your list 

  • In convenings of donors, like a board meeting, take the time to bring up DAFs as an agenda item to remind people when and how they can use them to support your org. 

  • In a planned giving conversation, if you know a donor has a DAF, remind them that they have to proactively name a beneficiary! Most DAFs default setting is that funds in a DAF are bequeathed to the DAF provider unless the account holder adds a beneficiary like a family member or your organization!


 

2. If we’ve never had a DAF strategy, where do I start? 


It’s most important to just get started - so start small. The easiest first step you can take is to add something on your website about using your donor advised fund for donations. 


Here are a few steps your organization can start taking today:

  • In any part of your website talking about donating, remind people they can use their Donor Advised Fund and share your EIN so it’s easy to look up.  

  • If you have a Ways to Give Page, make sure there’s a dedicated section for DAFs. 

  • It’s even better to have a whole page dedicated to Donor Advised Funds sharing the benefits of DAFs and how to support your organization. 

  • All of these options are made more effective if you have a clear Call To Action - ideally a seamless way for an inspired donor to donate with their DAF right on your website without any redirects.


Learn more about all the benefits of fully embedded DAF giving on your website.


 

3. What can we do to make sure we’re set up correctly to receive gifts from different DAFs?


Every fundraiser has a story about a DAF gift going missing. Sometimes a check was sent in the mail but never showed up, or other times the gift was stuck under review at a DAF provider leaving the org in the dark. The most common reason for this is that there are errors or inconsistencies in an organization’s name or address at some of the 1,150+ DAFs in the country. 


The average DAF gift is nearly $5,000 - you don’t want to be missing any of them! It’s worthwhile to double check with the main DAFs that you know your donors use to ensure that information is correct.   


If you’d like assistance running this check, Chariot is able to screen all of the major DAFs to discover and correct any of these errors with our My DAF Status solution. Even some of the largest organizations in the country have been shocked to find out where there were mistakes that could have been costing them serious money. Please reach out if you’d like to run My DAF Status for your organization!


 

4. Are DAFs really that common? Isn’t it just the mega rich who use them?


DAFs have evolved significantly from their origins decades ago. While they historically were used by the ultra wealthy, there are now over 3 million people using DAFs! So yes, DAF accounts are still large with an overall average account size of $117,466 (According to the latest Nonprofit Trust DAF report), but the median is $19,442 at Fidelity, the largest provider in the country. 


There is a really long tail in the distribution of account users that are still making significant contributions, but likely fall below most organizations’ definitions of Major or Principal gifts. This is why it’s important that the entire fundraising team is informed on DAFs and incorporating DAF fundraising into their work, not just major gifts. 


If you’re interested in learning more about the history of DAFs, check out this interview with leading philanthropic advisor, Dan Greenspon


 

5. How can we connect with more DAFs and DAF donors?


There are two important intermediaries that have access to a large concentration of DAF donors: Financial Advisors and DAF Providers themselves. 


  • Financial advisors: Someone that is setting up a donor advised fund is typically doing so as an intentional part of their personal financial planning. That means that their financial advisors are highly likely to be a part of the conversation around their philanthropy and love being able to make suggestions of high impact organizations that align to their client’s interest. Building relationships with financial advisors in your community is a great way to unlock more direct access to their clients that are most aligned to your mission.


  • DAF Providers: Most DAFs also like to add value for their donors by helping them connect with high impact organizations. Community foundations in particular like to provide extra services to their DAF holders where they help connect them to organizations that will best align to their impact goals. By sharing your impact story with those program managers, you’re making their job easier! They can now share an interesting opportunity with their DAF account holders that you’ve made extra easy to communicate.

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