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There’s never been a better time for nonprofits to include donor-advised funds (DAFs) in their fundraising plan. We’ll walk through the benefits of DAFs for both donors and organizations and review the core elements of a strong DAF fundraising strategy, including:
- Make DAF giving easy (and fun!)
- Know your donors
- Understand sponsoring organizations
- Incorporate DAFs into your planned giving programs
- Take a different approach with donors and sponsors
Why should nonprofits have a donor-advised fund strategy?
Some organizations may be a bit skeptical about DAFs, worried that donors are just squirreling their money away and not actually contributing to charity. But the numbers disagree: In 2021 alone, contributions to donor-advised funds increased by 46.6%, and the number of DAF grants given increased by 28.2%.
With this kind of growth, nonprofits can’t afford to ignore DAFs any longer!
Donor-advised funds can present an exciting opportunity for nonprofits to raise significant funds from their existing donor base—and attract new donors looking to contribute to good causes through this growing charitable vehicle.
Who benefits from DAFs?
DAFs used to be limited to wealthier donors, but over the last few years, more individuals, families, and even workplace giving programs have embraced the perks that come with DAFs, including tax incentives and the ability to grow charitable contributions through investment opportunities.
Additionally, DAF donors can hold complex assets and additional retirement funds in their accounts to form legacy gifts for their favorite charities. Because funds can be granted at any time, donors can also send significant contributions to organizations when they need it most.
With an intentional DAF strategy, charities can see long-term benefits—not just one-off gifts. Creating a proper DAF fundraising strategy for your nonprofit can:
- Ensure that donors, staff, and volunteers understand DAFs and their benefits
- Help organizations find new DAF donors
- Prepare for any unforeseen expenses
- Strengthen planned giving programs
What can’t you do with DAF funds?
While donor-advised funds can be beneficial for many nonprofits, it’s critical to be aware of the ways that donors cannot use these funds, including:
- Support political groups, personal crowdfunding campaigns, or any other non-501(c)(3) activity
- Be given in exchange for a gift (auction items, raffle tickets, a table at a gala, etc.)
- Provide grants and scholarships to specific individuals
- Make a qualified charitable distribution from an Individual Retirement Account (IRA)
That said, there’s still so much that you CAN do with DAFs, so let’s get started!
5 game-changing DAF fundraising strategies
The following strategies can help nonprofits build relationships with DAF donors, communicate with their supporter base effectively, and set themselves up for long-term success.
1. Make DAF giving easy (and fun!) ✨
Donors won’t know they can contribute to your cause using their DAF unless you inform them! There are several steps you can take to ensure finding your organization and giving with DAFs is as seamless as possible:
- Make it easy to find 👀 Include a DAF donation option on all of your fundraising forms, pages, and website widgets.
- Educate supporters 🧠 Add a section to your website or donation page that educates readers on DAFs, grant opportunities, and planned giving programs.
- Communicate with your team 👋 Educate your staff on what DAFs are and how to communicate your grant needs effectively.
- Craft a communication plan 📣 Create a plan for engaging with DAF donors for your staff, board members, and volunteers to follow.
- Show you’re legit 💪 Keep your organization’s information updated on websites that DAF providers use to verify your nonprofit status, such as GuideStar and Charity Navigator.
- Send targeted messaging 💌 Target DAF donors with specific appeals via direct mail, email, and social media.
Giving through a DAF is now easier than ever thanks to Givebutter’s DAF donate button—the very first of its kind to hit the charitable sector. ✨ Givebutter is the industry’s leading nonprofit fundraising platform, designed to make charitable giving effective, affordable, and most importantly—fun.
You can now accept DAF donations on any Givebutter donation form, fundraising pages, or event. The best part? Just like all of Givebutter’s other engaging fundraising features, it’s completely free to set up and use!
2. Know your donors 💡
You can’t have a DAF fundraising strategy without the right donors. Educating your supporters on donor-advised funds and how they can make a difference with them is vital—and so is connecting with DAF donors before and after they give.
Find, educate, and strengthen relationships with DAF donors with in-person seminars about DAFs and how they can make a difference for your organization. And never underestimate the power of asking directly in one-on-one conversations, “Do you know about donor-advised funds?”
As you learn which donors have a DAF and which are interested, don’t forget to keep track of this information in your donor database.
3. Understand sponsoring organizations 🤝
Donors often use community foundations or the charitable arm of companies like Fidelity to house, invest, and ultimately grant DAF funds. DAF sponsors like these have grantmaking abilities and are often the ones to find nonprofit recipients that fit donors’ interests. Donors trust sponsors, so it’s in your interest to earn the trust of sponsors, too!
Through proactive outreach and networking with sponsoring organizations—as well as applying for available grants from local community foundations—nonprofits can learn more about DAF opportunities and build relationships with sponsors that can benefit them well into the future.
4. Incorporate DAFs into your planned giving programs 🎁
While DAF donors can’t give from an IRA, that shouldn’t stop you from educating planned giving prospects on DAFs—and educating DAF donors on planned giving.
Many planned giving donors have access to complex assets and would be willing to donate those to your nonprofit, but unfortunately, some donors shy away from the complicated system that exists with these gifts. Plus, many nonprofits are not prepared to accept them. DAFs make it easier for nonprofits and donors to include complex assets in legacy gifts.
5. Take a different approach with donors and DAF sponsors 💌
Since donors receive immediate tax breaks when they contribute funds to their DAFs through sponsoring organizations, they don’t need a tax receipt or official acknowledgment in the same way that a donor giving through Venmo does. That said, don’t skip this critical step of acknowledging their gift!
Nonprofits that receive DAF grants must instead send a personalized thank you to the donor and start building a relationship. The easiest way to track DAF donations is to give hard credit to the sponsor and soft credit to the donor in your database. This information will help your team communicate better with each party and set you up for a successful relationship moving forward.
💪 Pro tip: Thanks to Givebutter’s native integration with Chariot, when a donor gives to your nonprofit through their DAF on any Givebutter form, you’ll actually get real-time donation details and key donor contact information right in your dashboard.
Crush your DAF fundraising strategy with Givebutter
Here at Givebutter, making it easy (and fun!) to give to good causes is kind of our thing. And now, with our cutting-edge DAF donate button, we’re helping nonprofits kickstart the conversation about DAFs with their community of supporters! 💪
Show your donors just how simple and impactful it can be to contribute with DAF funds right on your website, fundraising pages, donations forms, and events—and set the stage for a solid DAF fundraising strategy for the future.
Sign up for your free Givebutter account and start raising more through DAFs today!
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