How Donor-Advised Funds Can Supercharge Year-End Fundraising

Don't sleep on DAFs....they can mean big fundraising dollars and loyal supporters for your nonprofit.

How Donor-Advised Funds Can Supercharge Year-End Fundraising

When the pressure is on to hit annual fundraising goals and the calendar year is winding down, nonprofits should leave no stone unturned to maximize giving.

It goes without saying that all of the traditional year-end campaign advice stands, and there are plenty of tips about what to do all the way up until the end of December. But for now, we want to shine a light on an often-underappreciated vehicle for fundraising: Donor-Advised Funds, or DAFs.

What Are Donor-Advised Funds?

It’s easiest to think about DAFs as a piggy bank for donors. Charitable organizations, such as foundations, establish a separate fund for donor contributions. An individual can deposit assets, such as cash, stocks, or real estate. They receive an immediate tax deduction and can then recommend where the funds should be dispersed over time. The sponsoring organization (the foundation) manages the funds and facilitates requests for disbursement.

According to the National Philanthropic Trust, DAF grants have increased every year since 2009 and have more than doubled in the past five years. This fundraising vehicle can weather economic storms: stock market losses might decrease the value of the assets in DAFs, but the number of DAF accounts and the grants from those accounts have continued to rise steadily.

The takeaway? Don’t ignore DAFs. When your donors are feeling the effects of inflation and declining disposable income, DAFs are still holding steady and can be lifesavers for your nonprofit.

In this article, we will take a look at who DAF donors are and how to engage them...and how to keep them.

Understanding DAF Donors

Who are these mysterious donors, and what makes them tick?

To recap, a DAF works like a charitable savings account:

  • Charitable organizations (like community organizations) establish funds for donor contributions.
  • Donors give cash, stocks, real estate, or other assets.
  • They receive an immediate tax deduction but can recommend grants to nonprofits over time.
  • The sponsoring organization manages the assets and accepts requests for disbursement.

This allows donors to park assets now, then thoughtfully choose where they’ll have the greatest impact later.

Unlike quick, emotional donations triggered by a social media post, DAF gifts are typically strategic and carefully considered.

DAF donors are often high-net-worth individuals who:

  • Prefer planned giving
  • Value research and long-term impact
  • In some cases, appreciate anonymity

Because the average DAF account is larger than $140,000, these donors have significant giving capacity, and many are deeply motivated to leave a lasting legacy.

So, how do you stand out with a group that’s thoughtful, strategic, and deliberate with their giving?

5 Strategies to Engage DAF Donors

Traditional fundraising still matters, but if you want to attract DAF gifts, there are a few smart extra steps you can take.

1. Teach DAF Donors What Sets You Apart

DAF donors want to make informed decisions. Help them by offering clear, factual information about your impact:

  • Your website should highlight your mission, your outcomes, and your Employer Identification Number (EIN). Stick that in your footer or on your “contact us” page.
  • Update your GuideStar and Charity Navigator profiles regularly, as they are essential research stops for donors.
  • Social media can be effective at sharing success stories and real impact numbers.

Even if you can’t quantify everything, share what you can. If you filled 1,000 backpacks for children in need, that’s an impact statistic.

Make it easy for donors to see your effectiveness immediately.

2. Make It Obvious You Accept Donor-Advised Funds

Donors can’t recommend a grant if they don’t know you’re an option. Reach out to your donors!

  • Send an email to supporters, explaining that you’re excited to accept DAF donations.
  • Use social media announcements leading up to major campaigns, such as year-end giving, to remind donors about DAF options.
  • Update your donation forms to include a DAF payment option (like DAFPay at CharityEngine.)

Tip: Use your nonprofit CRM to celebrate significant birthdays (40, 50, 60) with a personal phone call. That’s a great time to mention DAFs as a tax-savvy giving strategy!

The easier you make it for donors to give through a DAF, the more likely they are to act.

3. Build Relationships with Financial Advisors

Want a shortcut to DAF donors? Get to know the people advising them.

Start close to home:

  • Ask board members if they know bankers, attorneys, or financial advisors.
  • Attend finance and estate planning events in your area.
  • Host lunch-and-learns for local advisors to showcase your nonprofit.

And when you build those relationships, offer value first. Share impact reports, invite advisors to site visits and events, and provide one-pagers or other compelling material they can share with clients.

When advisors trust your mission, they’ll recommend you. This can turn one relationship into many donor connections.

4. Spot DAF Donors, Then Make it Personal

DAF donors might be hiding in plain sight!

Did you know that more than 26 million Americans have access to workplace-giving programs, such as matching gifts, that use DAFs? They’re already in your database!

  • Check email addresses. If you have many gifts from employees at the same company, this can signal DAF-based giving.
  • Prospect research and wealth screening tools, sometimes built into your CRM, can help identify donors with DAF access.
  • Send an email educating supporters about DAFS and let interested donors self-identify.

Once you know who your DAF donors are, plan personal, strategic outreach asking them to recommend a grant for your nonprofit.

5. Offer Donors a Legacy That Will Make Them Proud

Many DAF donors are motivated by the idea of lasting impact, so make it easy for them to create a meaningful legacy.

  • They can fund a tangible product, like a community garden or a scholarship fund.
  • Invite several mid-level donors to leave a legacy together. They can even name it!
  • Consider ideas that reflect innovation, mentorship, or social change to appeal to DAF donors.

The goal isn’t so much prestige as it is purpose. Offering timeless impact will appeal to their deepest motivations.

Donor Benefits of DAFs

To understand the whole picture and be able to educate others, it is helpful to know why DAFs are appealing to donors. When donors contribute to a DAF, they:

  • Can easily contribute a broad range of assets
  • Will reap the tax benefits of a charitable donation when they transfer assets
  • Are investing their assets, which can rise in value, tax-free
  • Can contribute assets that have appreciated, avoiding long-term capital gains taxes
  • Can support charities over time
  • Eliminate the headache of selling assets and filing documents

This is an attractive option, particularly to major gift donors who have significant funds to disperse across several nonprofit organizations. These benefits can be used when communicating with prospects and educating them about their options.

How Nonprofits Can Retain DAF Donors

Keeping DAF donors engaged looks a lot like major gift stewardship, but with a few crucial tweaks.

  • Thank the right person! Even if the check comes from Fidelity or Schwab, thank the donor who recommended the gift.
  • Personalize consistently, using your CRM to customize outreach based on the donor’s giving history.
  • Invite ongoing engagement through events and volunteer opportunities. You want them to continue to see the value of their gift.

Once these relationships are established, consider asking for a more regular gift from their DAF and discussing planned giving.

How Nonprofits Can Find DAF Donors

How can nonprofits tap into this world of DAFs? There are some strategies that can help!

  • Build relationships with sponsoring organizations. If you can partner with them, you’ll build awareness of your mission and more easily connect with donors.
  • Talk about DAFs with your donors. Whether you want to include a DAF-giving option on fundraising communications or include an option on your website to give from a DAF, make sure donors know it’s an option. And if you get a quizzical look, ensure you understand DAFs well enough to educate your donors.
  • Target potential DAF donors with compelling case studies. Showcase your nonprofit’s impact and point to specific ways they could amplify that impact.
  • Be flexible in the kind of funds you accept. Can you accept multi-year grants or in-kind gifts?
  • Help your donors establish recurring automated grants from the sponsoring organization. This will help with forecasting and provide a solid fundraising foundation for your nonprofit. If you’re a CharityEngine client, our Opportunities Dashboard will help you track major donors, federal grants, and corporate giving, or create any specific workflow.
  • Check to see if the sponsoring organization offers an online portal to embed onto your website. This reduces donor friction as donors can initiate grant recommendations directly from your website.
  • Research whether you have any local community foundations that help donors identify nonprofits for grants. These are important resources for local nonprofits and can potentially connect your organization with donors.

Winning the Hearts of DAF Donors

Is it harder to win the hearts of DAF donors than regular donors? No, it’s not harder, but it is a bit of a different approach.

For starters, DAF donors tend to fall in the major gift category.

Communications with them should focus intensely on impact and impact at all levels. You might want to discuss the volume of food collected by your food bank, the number of people it feeds, and the community members who volunteer or are employed. Additionally, you could highlight the ways your office reduces its carbon footprint. Then you can go even more micro and share a case study. Lead with data and show clearly how your work directly addresses issues DAF donors care passionately about.

Education is important. Whether you’re hoping to engage an existing DAF donor or share the opportunity with existing donors, know your stuff. Be able to articulate the tax benefits as well as how the grant can help your organization accomplish its mission.

Finally, highlight your flexibility. Does your work address the multiple interests of the donors? Or can you communicate their ability, through a DAF, to easily support various causes within a certain timeframe?

Consider ways you can appeal to these donors. Can you partner with a sponsoring organization to produce a webinar that explains DAFs to donors and discusses how these funds can impact your mission? Are there ways you can increase transparency or offer accessibility when donors have questions?

Year-End DAF Donor Push

Granted, much of this information is helpful for a longer-term strategy than can be implemented for year-end giving. However, a direct appeal from your nonprofit to DAF donors is something that could still increase your year-end numbers.

You can send an email discussing DAF and its potential impact on your nonprofit’s mission. You can put a banner on your website, launch an SMS campaign, or add an announcement in your donor portal. If you then get questions about what a DAF is, you can jump in and start a conversation.

Finally, let me hit you with some numbers: There are more than two million DAF accounts, and the average size of an individual account is estimated to be almost $125,000. The average payout rate hovers between 20% and 30%. If you do the math, that’s a lot of money up for grabs. Make sure your nonprofit is raising its hand!

And, as always, if we can help with fundraising and donor management, we’d love to show you our unique platform and talk about how our solution can help you raise more money.

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