SEVEN STEPS TO SECURE GIFTS FROM DONOR-ADVISED FUNDS

 

If you’ve been putting off implementing a strategy to secure gifts from donor-advised funds, let this be the year that changes that. Why? The numbers are too big to ignore.

  • Donor-Advised Fund (DAF) contributions represent 8% of all donations in the USA.
  • Total Assets in DAFs in 2023 was $251.52B
  • Total Value of Grants made by DAF fundholders in 2023 was $54.77B
  • Total Value of Contributions made to DAFs in 2023 was $59.43B
  • Average DAF Account size in 2023 was $141,120

Donor Advised Funds (DAFs) are a popular philanthropic vehicle that allows donors to contribute funds to a dedicated account held by a sponsoring organization, such as a community foundation or a financial institution.

As a result, Donor-Advised Funds are the fastest-growing charitable giving vehicle in the United States as they are:

  • One of the most tax-advantaged ways to give to charity.
  • One of the most efficient ways to give to charity.
  • A tax-efficient way to build a charitable legacy.
  • Established to provide more immediate income tax deductions for donors.
  • Have the potential to reduce capital gains taxes and estate taxes.
  • One of the most flexible ways to give to charity, allowing donors to give when, what, how, and where is most favorable for them.

Your organization can reach out to prospective DAF donors all year long – not just at year end. That means today is a great day to start!

By incorporating DAFs into your fundraising strategies, you can access additional funding sources, cultivate donor relationships, and advance the mission of your organization to create positive change in the communities you serve.

How can you tap into this $250+ billion opportunity?

 

72% of fundraisers responded in a recent survey by FreeWill that one of their biggest challenges is not knowing which of their donors have a DAF.

 

You can start your journey to access donor-advised fund (DAF) donors by understanding how DAFs work and by promoting your organization to potential donors who have DAF accounts.

Here are seven ways to start:

  1. Educate your donors about the benefits of using a DAF to make charitable contributions. This includes providing information on how DAFs work, the tax benefits they offer, and how donors can recommend grants to support your mission.
  2. Remember your past board members as they may fit the demographic and behavioral trends of DAF donors. Make a list of past board members and call to check in on them. Then, make sure you ask whether they have a Donor-Advised Fund.
  3. Incorporate a sentence such as this into every form of communication you send to prospective, current, and past donors: “Will you consider supporting [XYZ] today? (Note: Many of our donors choose to give stocks, gifts from their IRA, cryptocurrency, and/or from their Donor-Advised Funds to see even larger tax savings.)”
  4. Highlight DAF giving options on your website and in your fundraising materials. This includes providing clear instructions on how donors can recommend gifts from their DAFs to support your organization. Do not forget to check your donate page too. Place a link to “give stock,” “give crypto,” and “give from my Donor-Advised Fund” on your main donate page – not just your “Ways to Give” page.
  5. Engage with DAF sponsoring organizations to build awareness within them of your mission and programs. This may involve participating in webinars, conferences, or other events hosted by DAF sponsors to connect with potential DAF donors.
  6. Steward existing DAF donors by providing them with regular updates on the impact of their gifts. This includes sharing success stories, program updates, and other information that demonstrates the value of their support.
  7. Distribute a donor survey to current donors. Asking them for feedback on their giving experience with your organization as well as including questions that provide you with demographic updates, such as whether they have DAF.

Start engaging proactively with prospective DAF donors NOW. Join the nearly 60% of nonprofits that plan to seek DAF gifts this year. By understanding how DAFs work and by actively promoting your organization to potential DAF donors, you can effectively access this important source of charitable support.

 

Take ActionAt DBD Group, we have a bias for action. Plans are great, but they’ll never go anywhere unless you take action. This month, the DBD team will be sharing ways for you to jump start your work in 2025.

 

 

 

 

Posted by Robyn Furness-Fallin
Robyn Furness-Fallin

Written by Robyn Furness-Fallin

Robyn Furness-Fallin, CFRE, offers financial development and volunteer leadership consulting for nonprofits and higher ed. As a Senior Consultant with DBD Group, Robyn is a shrewd strategist who helps bring clarity and focus to the campaigns she supports.

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