This blog post is based on podcast episode. Listen now: Proven Strategies to Maximize DAF Impact for Nonprofits

In recent years, donor-advised funds (DAFs) have emerged as one of the fastest-growing charitable giving vehicles. DAFs are donor-established accounts funded with assets such as cash, real estate, or securities, allowing individuals to manage their contributions to nonprofits strategically. In 2023, contributions to DAFs reached an impressive $59.43 billion, according to the National Philanthropic Trust.

While donors can receive significant tax benefits when contributing to DAFs, the distribution of these funds can take time. Nonprofits may face challenges, including anonymous gifts or contributions misaligned with their programs, which can raise questions about the role of DAFs in fostering donor relationships.

Despite these challenges, DAFs present unique opportunities to strengthen donor relationships and advance your mission.

Leverage Donor Intent

While DAFs introduce a layer between you and your donors, they can also serve as powerful tools for fostering deeper relationships. DAF donors have made a deliberate choice to support causes they care about—showing their connection to your mission. They believe in what you are doing. They’ve chosen charitable giving among many financial options.

Donors who opt to give through a DAF account are more likely to continue their support over time. By setting up a DAF, donors demonstrate a commitment to ongoing support, rather than a one-time contribution.  DAF donors, having integrated charitable giving into their financial strategy, are naturally positioned for long-term engagement. Their giving could grow as your mission grows. Donations made via DAFs may drive significant opportunities to build relationships and target higher-capacity donors.

The average DAF gift ranges from five to twenty times higher than traditional gifts — $1,100 compared to $68.

That commitment to higher giving may also provide an opportunity as you build a deeper relationship with DAF donors as you speak to what compels their giving. And they’ve prioritized support for your mission in a way that is both tax-efficient and comfortable for them.

Embracing DAFs as part of your strategy will help focus on what matters most to your donors.

Engage DAF Donors Digitally

Studies reveal that most DAF donors are tech-savvy, preferring digital platforms to manage their giving. They indicate online giving platforms as one of their preferred ways of communication and engagement. This can help you create digital outreach strategies that are more meaningful to them and their interests. These donors can be seamlessly integrated into your digital outreach and stewardship plans, with personalized messaging tailored to their preferences.

The right technology can help you capture key donor preferences when they choose your organization as their charitable partner. Other solutions are designed to help drive insights into what compels individual generosity.

Reaching donors through their preferred communication channels is more critical than ever. Technology continues to evolve, driving faster, stronger, and more nuanced ways to connect with donors. It’s important to choose solutions that grow with your organization and also to continuously seek out platforms that you can incorporate.

With the right technology, DAFs can be a great extension of your organization’s cultivation and stewardship strategy.

Strengthen Visibility with DAF Advisors

As DAF advisors seek to accommodate their clients, your organization can help them help their customers reach their contribution goals.

DAF advisors can process many types of assets and they build accounts to manage donations over time. Since those funds can be invested for tax-free growth, gifts to nonprofits can far exceed the amount the donor initially put into the fund.

Keep sponsoring organizations, those managing DAFs, aware of how your mission aligns with their donors’ goals. While you may not be able to do direct solicitation, you can add a personal touch to your stewardship efforts. Thank them for the gift with an illustration of its impact. Consistently doing so will not only keep your organization on their radar but also build trust in how you steward their clients’ contributions. Transparency is key.

It’s equally important to communicate with donors and potential donors.

• Be persistent in reminding donors that your organization supports and appreciates DAF gifts.
• Expand outreach around donors who may not currently be participating in a DAF.
• Show enthusiasm with your donors for giving vehicles that work best for them.
• Inspire donors through storytelling that illustrates your mission to make transformational gifts.
• Foster connection with DAF givers to encourage continued conversations.
• Optimize your website, digital, and social media channels to link back to financial institutions with charitable funding mechanisms.

Finally, remember to steward even anonymous gifts. By showing public appreciation in your emails and social media, you’ll likely reach the donor and the sponsor — as well as inspire in-kind donations. Just because a donor chooses not to be identified doesn’t mean they don’t want to see how impactful their gift is.

Uncover Donor Motivations

It’s also important to keep exploring how donors relate to your mission. Encouraging them to share their stories with you, deepens trust and helps you support them. Even though donors support your organization they may not be comfortable sharing their reasons. So you should look for additional insight with the information you do have available within your data file, including anything captured from your website.

Assess donor behaviors. Seek ways to illuminate personal donor connections to your mission. Look for patterns within your database to further assist you in developing targeted strategies. DAF donors are comfortable managing their activities across different platforms, so you may discover they’ve engaged with your nonprofit across multiple social media channels or events. A DAF gift is rarely a first interaction with your organization.

Pay attention to donor activity on your website, such as the pages they visited and the time spent on each. Perhaps they requested a digital publication or made comments in your social media feeds or their own — in addition to research on independent sites like GuideStar. Donor analysis should be crucial, and insights from technology can help you update donor profiles and provide opportunities for deeper engagement and stewardship.

Position Your Nonprofit to Thrive with Donor-advised Funds

By continuously analyzing donor data, embracing DAF relationships, and fostering thoughtful communication, your nonprofit can maximize the potential of this critical giving channel.

DAF giving is poised to continue to grow as a charitable strategy. More donors are taking advantage of its efficiency and benefits. And more donor-advised fund givers are seeking ways to make an even deeper impact. You can help them envision more transformative gifts.

Strategically leveraging donor-advised funds can foster lasting relationships, enhance high-capacity donor engagement, and align more closely with your mission. With a clear vision of how donor-advised funds can add to your giving community, you’ll position your nonprofit to grow with DAF donors.

Additional Resources

Solving the Challenges of Donor-advised Funds

The Rise of Donor-advised Funds: How Nonprofits Can Benefit From This Fast-Growing Giving Vehicle