More and more charitable dollars are coming from donor-advised funds (DAFs). That increase has charities and nonprofit organizations wondering how they can attract those dollars to advance their causes. After all, DAF donors tend to be closely involved with the organizations they support, offering generous grants, volunteering, serving on boards, and advocating for them. There are many ways DAFs can help charities, even during economic uncertainty or times of crisis, making them a vital and sustainable source of funding.
We’ve put together some tips to help leaders at charities and nonprofits better understand how to attract DAF donors, increase grants from DAFs, and get the most from these relationships. Engaging and appealing to DAF donors can help organizations widen their funding sources and set themselves up for a successful future.
9 Steps Charities & Nonprofits Can Take to Attract Grants From DAF Donors
There are several steps that charities and other nonprofits can take to maximize the grants they receive from DAF donors. Since DAF sponsors will not typically recommend specific 501(c)3 organizations to their donors, organizations must appeal to donors directly. These are things they can do to get on DAF donors’ radars.
1. Clearly State That They Accept DAF Contributions
The charity or nonprofit should clearly state on its website that it accepts contributions from DAFs, as well as from private foundations, bequests, appreciated stock, etc. This lets donors know without hesitation that they can grant to the organization rather than leaving them to question. Many charities only note that they accept direct donations from checks and credit cards. A statement of willingness to accept DAF grants sends a message that the organization is efficient and used to donations from various charitable vehicles.
2. List Vetting Information on Their Websites
DAF sponsors need to vet each organization their donors want to grant to. Organizations that list vetting information on their website can streamline the granting process. They should provide their tax ID number and address, as well as the contact information for a development staff member in case the DAF sponsor has any questions or prefers to send funds via ACH.
3. Evaluate Contributions From DAF Donors
Donors who have DAF accounts tend to be more generous when recommending grants from those accounts than if they were to donate directly to charities via check, credit card, or appreciated stock. Evaluate the contributions made to your organization and others in your field to determine the value of appealing to DAF donors.
4. Ask Donors How They Prefer to Donate
When meeting with donors, simply ask how they prefer to donate. If appropriate, leaders can even ask directly if they have a DAF. Some who have donated via other means may contribute even more if they know they can grant from a DAF account.
5. Engage Donors When a Grant From Their DAF Is Received
Engage donors every time a grant from their DAF is received, provided the organization is made aware of the donor’s name. If a donor has taken the time to establish a DAF, they are likely serious about philanthropy. Inviting the donor for a site visit, volunteer activity, or fundraising event can amplify their investment and engagement in the organization, which may also increase the amount they grant.
6. Send Thank-You Notes After Receiving DAF Grants
One of the reasons donors discontinue support is because they are not properly thanked. Many DAF donors do not receive thank-you notes when they make grants from their DAF account. A small percentage of grants from DAFs are anonymous, but fundraisers should still send a thank-you to the DAF sponsor and request that they forward it to the donor. Not all DAF sponsors will do this, but it is worth the effort. Donors give anonymously for many reasons but often stillwelcome recognition. Once thanked and engaged, these donors may increase the amount of their next grant or become public donors and advocates for the organization.
7. Treat All Donations Equally, Regardless of Amount
It is important to thank all DAF donors, even if the grant is small. In addition to being a worthwhile practice to connect with all your donors, show appreciation, and increase engagement, keep in mind that it is also difficult to ascertainthe size of a donor’s DAF account. They may have more funds ready to grant if they feel good about the experience.
8. Pay Attention to the DAF Sponsor
Pay attention to which DAF sponsor has sent the grant check. For one, if a donor sends a grant from a DAF sponsor that is attached to a prominent bank or wealth management firm, that can indicate that the institution manages their money,so the size of their DAF and wealth might be substantial, even if the grant received is small. Additionally, different DAF sponsors appeal to different types of donors, and knowing your donor base can help you appeal to other donors like them.
9. Understand That Donors Have Different Timelines
Donors who gift large or appreciated assets like privately held stock, real estate, or insurance to their DAF may not feel comfortable making a large grant at one time to one charity. By donating to a DAF sponsor, donors still intend to make grants to their favorite charities, but they can do it over time instead of giving it all at once. Also, because the DAF sponsor does the work of accepting complex assets, the charity saves time, effort, and expense and simply receivesgrant checks. Understanding this process can help organizations play the long game in terms of engaging donors.
Implementing even some of these changes can have a major impact on an organization’s fundraising efforts. As DAF dollars continue to account for a significant portion of charitable contributions, it’s crucial for charities and other nonprofits to appeal to DAF donors.
NOTE: This article has been revised and updated from its original version written by Ken Nopar that also appeared at the Association of Fundraising Professionals.