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  • Writer's pictureDrew Schneider

DAFs Q&A with Scott Harrison

Scott Harrison - charity: water founder and Chariot advisor - recently joined Chariot’s CEO & Co-Founder Salo Serfati to discuss the importance of DAFs to nonprofit fundraising and his belief in Chariot’s ability to accelerate DAF giving.

Key highlights include:

1. The importance of DAFs to charity: water’s overall fundraising strategy - especially during times of economic uncertainty:

“Our gift officers are definitely having intentional conversations with donors around DAFs”

2. Scott’s top advice to fundraisers is to get familiar with DAFs and start talking to donors about them:

“There’s data that shows organizations who are having these conversations are going to receive more than 2x more DAF dollars than the ones who don’t.”

3. Scott’s personal alignment with Chariot’s mission:

“It’s a staggering amount of wealth that is sitting latent that is not saving lives that is not ending the urgent needs of people suffering around the world.”

The full transcript of the Q&A is below:

Salo: For anyone that is unaware, what is the story with charity: water? How did you get started and what does the future hold?

Scott: I started charity: water 17 years ago with a very simple vision - bring clean and safe drinking water to every human being alive on the planet. Unfortunately, still today, there are 771 million people who will drink dirty unsafe contaminated water. That’s about 1/10 people on the planet and we believe that number should be zero - that everyone should have access to life’s most basic need.

In the past 17 years we’ve raised over $750 million thanks to the generosity of millions of people around the world. We are funded primarily by those individuals. We receive no government grants and have very little foundation funding.

We’ve been able to help 16.8 million people get access to clean water - that’s only 1/47th of the people in need so we’re focused on scaling the movement of charity: water and growing the organization from about $100 million per year to have a much greater impact.

Salo: charity: water has always been a pioneer in creativity of what it takes to fundraise and solve a global problem like access to clean water. Now that you’ve raised $750 million, how are you thinking about the next steps in your fundraising and taking it to the next level?

Scott: We’ve really taken a little bit of a barbell approach that’s organically developed. We have almost 65,000 donors across 149 countries that are a part of our monthly giving community called The Spring - people give about $30 per month on average (it costs about $40 a month to give someone access to clean drinking water). That is a big part of our growth and annual donations now.

At the other end of the spectrum, we’ve seen a substantial increase in million dollar plus commitments, even eight figure gifts, as high net worth and ultra high net worth individuals want to engage in this problem, they want to engage with a highly effective and transparent organization. Now with ¾ of a billion dollars of experience and projects that are 15 years old that we can prove are sustainable and working, that’s really opened up that category for us.

We’re doing both of these things - we want to grow the 5s, 10s and 20s and we want to grow these million dollar gifts.

Salo: So how do Donor Advised Funds (DAFs) play into that strategy for you? I am a part of the Spring, I donate every month to charity: water, and I have a DAF. So what I have to do is go to my donor advised fund portal and submit a $40 donation every month. But on the other end of the spectrum, people with donor advised funds already have a lot of money set aside for charity so they can solve that other side of the fundraising effort that you’re mentioning.

Scott: DAFs are a growing part of our fundraising strategy. Especially during a down or uncertain economy, especially during a down or uncertain economy. This money has already been allocated for philanthropy and the donor has already received their tax benefits so the money given from a DAF isn’t competing with a donor’s monthly budget for costs or rent or food. So our gift officers are definitely having intentional conversations with donors around DAFs and maybe with some more tumultuous times ahead they’ll play a larger part in our donor comms.

Over the last 10 years, we’ve seen the number of donors giving through DAFs drastically increase. It’s primarily from donors who give gifts over $5k. I’d say about ⅓ of those 5k+ gifts come from DAFs now which is a substantial increase from 10 years ago.

Salo: There’s this really interesting trend happening in the DAF industry where 10 years ago they were primarily used by ultra high net worth individuals as an alternative to foundations. Now they have become super democratized. Anyone can open a DAF account today. So you’re seeing a lot more of those $5k donations today. The average is $4,798, but the median is $500 so you see people using these accounts to make gifts of all sizes. And as you know, once you recognize who that donor is and engage with them more meaningfully that could lead to that $1 million donation you were mentioning.

Salo: At chariot our goal is to make it as easy as possible to pay with a donor advised fund instead of a credit card. Essentially what we are is a new payment option on nonprofit websites that allows donors to check out or complete their transaction with their Donor Advised Fund. A neat side effect is the charity gets all the donation data upfront - they know I made a $40 donation to charity: water so you can thank that donor right away. So there’s a closed feedback loop.

We’re really privilege Scott to have you as an advisor of Chariot, so I’d love to better understand what got you excited about Chariot and how you saw it solving some of the pain points across the donor advised fund industry.

Scott: The mission of making it easier for people to use their donor advised funds online. It’s often been pretty clunky. It’s not as simple as going on a website and using apple pay where you can check out on charity: water with your credit card in 10 seconds or less. Sometimes you’ve got to call or you’ve got to write or you’ve got to submit a request. I love eliminating the friction. I think it will allow more money to flow from DAFs to charities.

The biggest challenge for us when it comes to DAF fundraising is that many of these gifts come with such limited information or even no information at all. So we often have trouble identifying which donor recommended the DAF gift and because charity: water prides ourselves on our reporting process, on showing donors exactly where their money is going, when we don’t receive that information it pains us because we’re not able to deliver on that high quality transparent, exceptional reporting experience. I know that’s one of the things that Chariot is working on as well which we’re really excited about.

Salo: I used to be part of The Spring with my credit card and I would get a monthly email explaining to me all the help I was providing around the world in getting people access to clean water. Once I switched over that transaction away from my credit card to my DAF, I no longer get those monthly emails because they don’t know I’m part of the spring because there’s no longer that inter-connectivity. Chariot is working with charity: water to make donor advised funds a native payment option so that anyone with a DAF can now be a part of that process just like everyone else which is great.

Salo: Looking toward the future, what do you see in a world where donor advised can more easily be paid with online? What does that world look like to you?

Scott: I think it would be great if it was as seamless as how we’re used to using our credits now. They’re saved in our phones, they’re saved in our chrome browser, saved in apple pay or google wallet. Venmo is pretty easy - someone just sent a request and I tapped a button this morning and the person got paid pretty easily. So I’d love to see a much more seamless integration with donor advised funds and I know that’s what Chariot has really focused on.

I’d like to see more money moving from Donor Advised Funds into the great causes in the world. It’s a staggering amount of wealth that is sitting latent that is not saving lives that is not ending the urgent needs of people suffering around the world. People dying of bad water, people who need access to healthcare, who are hungry, even in local communities certainly in the global community.

In that Chariot is able to encourage more generosity and more seamless flowing of the money that’s a great benefit to the world.

Salo: Today, in 2023, there's $234 billion sitting in donor advised funds, that's up from over $160 billion just last year so that’s growing at over 30% year over year. We speak to DAF donors all the time. They want to make this money move. They just need to connect with the organizations that they believe make a great impact toward the world. There’s just that disconnect between that DAF donor and the nonprofit. That’s Chariot’s mission, to connect the nonprofit with the donor together, so they can find organizations that they’re passionate about and actually get that money that they have set aside for charity and actually get it to the causes that are making an impact in the world. DAF donors are eager to make that change, we just have to improve those connections.

Salo: Scott do you have any advice that you would give to other nonprofit organizations with regard to DAF fundraising?

Scott: Donors are finding great utility in DAFs so it’s something that you need to get familiar with and the first step is just talking about DAFs with your donors. There’s data that shows organizations who are having these conversations are going to receive more than 2x more DAF dollars than the ones who don’t. It’s important to have your gift officers talking to people, talking about their philanthropy, asking them how they prefer to give, what are the charitable vehicles that they like to utilize.

If they’re using DAFs, ask what they love about their DAFs. How we can better identify those DAF gifts so we can thank them and steward their experiences. I think it's just a conversation that a lot of people are not having.

At charity: water we believe when you show people where their money went you have a much greater opportunity of stewarding that relationship and growing the engagement of that donor.

Salo: And there’s no better way to ask your donor about their DAF than just having it as a native payment option. You can direct them to your donate page, they’ll see credit card, PayPal and now DAF and that’s the easiest way to know whether they have a DAF and then to engage further with that donor.

Salo: And Scott, I read your book Thirst - for everyone watching this video I highly recommend it. It tells the story of how charity: water scaled from 0 to the large global movement it is today. You also talked about naming the organization so that one day your model could be expanded to other areas of need. How has that broader vision evolved?

Scott: To be honest, I was 30 and ambitious when I started. I didn’t really know anything about charity or institutional philanthropy. I thought I could copy Richard Branson at Virgin to launch a series of initiatives to solve every global problem. I don’t think I realized how difficult it would be to get people to care about the suffering of people living in very different parts of the world. Only about 4% of American philanthropy goes overseas and 96% stays here. I don’t think I understood how challenging it would really be.

But the deeper we got into the water issue and the more proficiency we developed as we scaled our work across 29 nations. I think we realized that water impacted so many of these other things we wanted to take on next. Half of the sickness in so many of these countries is caused by unsafe water and a lack of sanitation. More than one in three schools around the world don’t have clean water so it seriously impacts education, women & girls, local economic development - so many of these basic needs can’t be met without clean water. We recognized the importance of focusing on this most basic need in life and we’ve stayed focused.

Salo: I remember in the early days, you started the organization in New York City, and a way that you fundraised in the early days was setting up dirty water and clean water at fundraising events.

Scott: And we’re getting back to our roots! We’re working to set up a retail presence where we show people dirty water and clean water and have a similar effect, but hopefully more interesting now.

Salo: Thank you so much for your time Scott. Before we wrap up, is there anything else you wanted to share?

Scott: I’ll just add one more thing, one of the key benefits of knowing that people are giving through DAF or having that be their first interaction with us through Chariot is that we can identify them as a potential major donor and hopefully grow their giving.

Thanks for having me Salo - I’m really excited to be working with Chariot.


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