Donor advised funds (DAFs) are the fastest-growing form of philanthropy. DAFs are now ubiquitous.
Yet, many organizations simply respond to DAF giving instead of proactively promoting it. Successful development professionals promote DAF giving because they know it can be greatly beneficial to know where the DAF opportunities lie. Here are 3 tips for doing this successfully.
Promote DAF gifts everywhere you are asking
The goal is not to encourage your donors to start a DAF; but, to identify those who already have one. Studies show that donors give more generously via DAFs than when they give by check and, once a DAF has been funded, the donor cannot withdraw the funds or use them for a non-charitable purpose. It’s like an envelope of money, tucked away, waiting to be allocated.
You may be thinking, “I know my major donors very well and I already know who has a donor advised fund.” Did you know that the average account size of DAFs decreased by more than 20% between 2017 and 2018? There has been immense growth in the number of funds with balances of less than $5,000. This means that donors at all stages of your pipeline could be DAF holders.
Make DAF giving convenient for donors
Install DAF Widget on your giving page. We are promoting this ingenious, free tool from MarketSmart to all our clients. It’s a safe, secure, and convenient way to help them make a DAF distribution to your cause quickly and easily. They can find their fund among 800 funds in the system. You don’t discourage your donors away from online giving, so why not make DAF giving just as seamless and fast?
In addition to the DAFWidget, provide information on your website that donors can give to their DAF sponsors if they choose not to contribute via the DAFWidget: your organization’s tax ID number, address, and a personal contact in the development office.
Invest in stewarding DAF donors
When someone invests the time to learn about and establish a DAF, they are likely serious about philanthropy. These are the donors that we should be reaching out to personally and inviting to events, offering volunteer and other opportunities, and hosting for tours. The most important thing to understand is that a DAF gift should prompt a level of personal stewardship not usually extended to the casual donor.
Recognize DAF gifts accurately: thank the donor who recommended the grant, not the fund manager and eliminate all references to the gift being tax deductible. The donor received a tax benefit when the fund was established; once the fund exists, the donor forfeits all future tax benefits of giving. Here’s a handy acknowledgement template, courtesy of Fidelity Charitable Trust.
