This week, Chariot kicked off DAF Awareness Week with our session “DAF 101 for Nonprofit Staff.” Hosted by Mitch Stein, Head of Strategy at Chariot, and joined by Rick Peck, Founder & CEO of GiveTrust, the webinar broke down the essentials of Donor-Advised Funds (DAFs), their rapid growth, and how nonprofits can best position themselves to benefit from this powerful tool.
If you missed it, here’s a recap of the discussion—plus a quick primer on what DAFs are and why they matter for your organization. Watch The Recording Get The Slides
What is a DAF?
At its core, a Donor-Advised Fund is a tax-advantaged account dedicated to charitable giving. As Rick explained during the session:
“Think of a DAF like a 401(k) for retirement or an HSA for healthcare. It’s a container for giving—donors contribute, get an immediate tax benefit, and then recommend grants over time.”
Once assets are placed into a DAF, they are irrevocable. Donors can’t take them back, and the funds can only be distributed to qualified nonprofits. Popular contributions include cash, appreciated stocks, and even complex assets like real estate.
Mitch summarized it simply:
“There are no takesies-backsies—the money in a DAF can only ever leave as a charitable gift.”
Why DAFs Have Become So Popular
DAFs combine convenience with strategy. Instead of managing multiple receipts and donations throughout the year, donors consolidate their giving in one place. According to Rick:
“People see DAFs as an advantage over checkbook giving or even private foundations. They’re simpler, more flexible, and come with real tax efficiency.”
Other benefits include:
- Tax savings– donors can deduct the full contribution in the year they give, and avoid capital gains on appreciated assets.
- Growing generosity– the process of pre-comitting funds to giving often leads to setting goals and greater accountability, plus the investments within a DAF can grow tax-free, adding to the donor’s giving potential.
- Streamlined giving– one portal to manage all gifts.
Who Uses DAFs?
During the webinar, Mitch introduced three common “archetypes” of DAF users :
- The Organizer– everyday donors who want structure and convenience. They are often introduced to DAFs as an employee benefit.
- The Optimizer– couples or individuals contributing appreciated assets or large lump sums to maximize tax benefits.
- The Builder– families treating a DAF as an alternative to a private foundation, often following a major liquidity or inheritance event.
Despite these different categories, one thing is consistent across the board: DAF donors see themselves as smart, intentional, and data-driven. They often treat their giving like an investment portfolio—seeking measurable impact.
The State of the DAF Market
DAFs are no longer a niche tool. As Mitch noted, “this is a quarter-trillion-dollar sector and growing fast.” In 2023 alone, nonprofits received nearly $55 billion in grants from DAFs.
Even more striking: research shows that while most nonprofits are seeing flat or declining revenue from traditional giving, over 80% of participants in the 2025 DAF Fundraising Report reported growth in DAF revenue in 2024, with the median being +30% year-over-year.
DAF giving is also not limited to major donors. 69% of DAF gifts are under $1,000, which underscores the democratization of this giving vehicle across donor levels.
Why DAFs Matter for Nonprofits
One of the biggest opportunities with DAFs is what Mitch called the “power of pre-commitment.”
“Having a DAF is like walking into a store with a gift card instead of cash. The money is already earmarked for giving, so donors are more likely to act—and to give more.”
In fact, when donors switch from making gifts via credit card to giving through their DAF, their contributions to the same nonprofit grew by 10x on average (according to the DAF Fundraising Report).
Overcoming Barriers: Making DAF Giving Easy
Despite their popularity, DAFs are still underused in spontaneous giving moments. A recent survey by Giving Compass found that 37% of donors skipped using their DAF just on their latest gift simply because it was “too many steps”.
Rick emphasized that nonprofits can solve this friction:
“If you don’t make it easy for people, they’ll default to their checkbook or credit card. And that means you miss out on bigger gifts.”
Some practical steps for nonprofits:
- Audit your website– add your EIN and a dedicated DAF giving page.
- Include DAFs in your appeals– wherever you list ways to give, mention DAFs.
- Enable DAF technology– tools likeDAFpayallow donors to use their DAF as seamlessly as Apple Pay or PayPal, and is available ondozens of fundraising platforms.
Stewardship Matters Even More
A critical reminder from the session: DAF gifts are not tax-deductible for the donor at the time of disbursement, since the tax benefit was received when they made the contribution. That means nonprofits should not send a tax receipt. However, it is still very important to send a thank you to these donors, and it’s a step many nonprofits overlook. As Rick put it:
“Donors want to feel appreciated. I’ve seen fundholders cancel recurring grants simply because they never got a thank you from the nonprofit.”
It’s important to remember that DAF gifts come from individuals, it’s an institution that facilitates the gift for them. Not only should these donors be stewarded individually, it’s wise for organizations to use their major donor playbook for DAF donors regardless of their first gift size. DAFs are a powerful indicator of someone’s capacity and propensity to give.
Next Steps & Resources
Some of the recommended action items included:
- Review your gift acceptance policy– make sure DAFs are covered. Leverage this template to get started.
- Train your staff– everyone should be comfortable explaining DAFs - share this recording with the broader team.
- Test the process– try making a DAF gift to your own organization to see what donors experience. Learn more about getting your own DAF here.
- Take advantage of DAF Day- Claim your Chariot Account* to be verified and make use of the marketing toolkit.
- Download the 2025 DAF Fundraising Report– full of data, case studies, and checklists to go deeper on all aspects of DAFs for nonprofits. .
DAFs are reshaping philanthropy.
As Rick reminded us at the end of the session:
“Donor-advised funds aren’t going anywhere. If anything, they’re just getting started.”
For nonprofits, the takeaway is clear: the sooner you embrace DAFs in your fundraising strategy, the more sustainable and impactful your donor relationships will be.
