Donors often ask their trusted advisors about the best ways to donate to charities. One of the first things advisors ask is whether their clients want to grant publicly or anonymously. Advisors can offer better guidance when they know whether clients prefer public or anonymous donations since a donor-advised fund (DAF) is one of the few options that can assure anonymity.

Charities tend to prefer knowing the identity of donors so they can give them credit and properly thank them, but they must respect a donor’s wishes. Generally, anonymous donors don’t want to draw attention to themselves or the donation, while public donors appreciate the recognition and thanks, possibly hoping their name and stature encourage others to give.

Being able to donate anonymously appeals to prospective DAF donors. However, the National Study of Donor-Advised Funds finds that less than 4% of grants are made anonymously, suggesting that most transactions include fund and/or donor data.

There are several reasons why a donor might prefer to donate publicly or anonymously, as both offer their own set of advantages.

10 Reasons Donors Give Publicly

Public donations offer several key benefits for both the donor and the charity. Donors often choose to donate publicly for the following reasons:

  1. They can openly demonstrate support for causes and charities they believe in.
  2. It encourages others to give to a particular charity.
  3. Having visible donors enhances a charity’s credibility, especially if the donors are well-known in their communities.
  4. It signals to fellow donors that the charity is vetted.
  5. It can help charities get additional donations in a matching challenge, paddle-raise event, or other fundraiser.
  6. Public donations are a way to “lead by example” and show friends, family, and colleagues the power of donating generously.
  7. Openly donating shows children and heirs that philanthropy is important to the family and that a portion of assets will be given to charity during life and upon death.
  8. Donors can establish a relationship with the charity or like-minded donors, which may lead to more philanthropic opportunities.
  9. It lets the donor receive thanks, appreciation, and recognition from the charity, fellow supporters, and beneficiaries of the charity’s work.
  10. Public donations help establish a donor’s charitable legacy.

6 Reasons Donors Give Anonymously

Being able to donate anonymously is one of the benefits of opening a DAF account. Donors have many reasons for preferring anonymous donations, including:

  1. Giving anonymously prevents the charity from soliciting them for additional or larger donations.
  2. It keeps other charities that do similar work from also soliciting donations.
  3. Donors can keep their personal wealth private from volunteers, board members, colleagues, and even friends and family.
  4. Keeping their wealth private prevents large donations from altering personal or professional relationships.
  5. If an organization is controversial or not widely endorsed by one’s community, the donor can stay anonymous to prevent judgement.
  6. Anonymous donations can also obscure the fact that a donor’s assets are managed by a high-end financial institution.

Donate the Way That Works Best for You

The decision to give publicly or anonymously should not be made lightly. While most donors and charities prefer public giving, there are situations in which anonymous donations are prudent. Some donors always give publicly or anonymously, while others give occasional anonymous gifts. Others may even choose to donate a small amount publicly but give a larger amount anonymously to the same charity.

The bottom line is that there is no wrong way to support philanthropic causes. Donors must choose the method that works best for them.

Continue the Conversation With American Endowment Foundation

By discussing all the options available, advisors can help their clients think through the best ways in which to have greatest charitable impact – while also addressing any concerns. Donors, charities, and advisors could all benefit from the conversation.

If you or your client would like to talk more about opening a DAF with American Endowment Foundation, or the benefits of donating publicly and privately, feel free to contact us. We’d love to continue the conversation and see how we can expand philanthropy together.