Don’t be afraid to tap into donor-advised funds (DAFs) 

October 10, 2024, will be the first-ever DAF Day, a giving day dedicated to donor-advised funds (DAFs). The initiative was launched in July by a group of 60 nonprofits, fundraising platforms, and DAF sponsors to expand DAF giving by encouraging their networks to give from their DAF accounts on one day, together.  

Here’s what nonprofits need to know to get involved and make the most of DAF Day.  

What is a donor-advised fund (DAF)? 

A DAF is a tax-advantaged charitable giving account, often compared to a 401(k) for retirement savings or a Health Savings Account for health care expenses. DAFs are the fastest-growing vehicle in philanthropy, with annual disbursements increasing 600% over 10 years to $52.2 billion in 2022. That year there were $229 billion set aside in two million DAF accounts nationally. 

Not only do DAFs help donors streamline their giving and provide upfront tax benefits, they also help nonprofits increase revenue. Research from K2D Strategies and Chariot, a DAF payments company, indicates that when an existing donor starts giving to an organization from their DAF, their annual support to that nonprofit increases, on average, by 96%.

Why do we need a DAF Day?  

DAF Day was launched to raise awareness, address misperceptions, and expand usage of DAFs. Despite the growing popularity of DAFs, some donors underutilize their accounts, while many others have misconceptions or are unaware of DAFs altogether. A survey found that 83% of the public don’t know what a DAF is. Nor are nonprofits talking much about DAFs, with 42% making no mention of them in their marketing. 

And while many people think of DAFs as a tool for older or ultra-wealthy people, newer, high-growth DAF sponsors are drawing a much younger audience. One such example is Daffy, where the average account holder is 41. In addition, many organizations, platforms, and events now include a DAF payment option that connects DAF donors to online campaigns in real time. This means DAFs are increasingly usable in crisis response (through platforms like GoFundMe), peer-to-peer events (like the Pan-Mass Challenge), and giving days (through giving day tools like Givebutter). 

Yet, according to the DAF Research Collaborative, 37% of DAF accounts can go unused in a given year. In a challenging overall fundraising environment, everyone wants to make sure that the funds set aside for charity are being put to good use, quickly. Giving days create urgency and a sense of togetherness for donors—and both can motivate action. 

To participate in DAF Day, nonprofits can sign up to be listed in the participant directory and receive a free marketing tool kit. Nonprofit fundraisers can also join a private LinkedIn group to collaborate on campaigns and attend educational webinars. 

Tips for nonprofits on DAF Day 

There’s still plenty of time to make the most of the first-ever DAF Day. Here are five ways other nonprofits are preparing for October 10. These tips will also be helpful for your organization’s ongoing efforts to increase DAF giving.  

1. Conduct a DAF audit 

Audit your giving forms and fundraising communications. Are you mentioning DAFs everywhere you can to let donors know giving through their DAFs is an option? Simply including language such as “To donate with your donor-advised fund (DAF), go [here]” in email solicitations or mailers goes a long way. 

2. Create a DAF page on your website 

Make sure you have a DAF section or page in the Ways to Give portion of your website so it’s clear to donors that you accept DAF gifts. Make it easier for them to complete a request. A few pointers: 

• List your organization’s full legal name with IRS, EIN, address, and a point of contact. 

• If you have a digital DAF giving tool such as DAFpay, be sure to include it on this page.    

• Here are some examples from the ACLU, March of Dimes, and Boys & Girls Clubs of America. 

3. Coordinate with your team 

Coordinate with your team to see if there’s room in the communications calendar to promote your nonprofit’s participation in DAF Day and incorporate DAF language into year-round communications. Organizations are leveraging social media, blog posts, emails, postcards, and SMS to engage donors, starting about a month in advance. 

4. Ask board members to become DAF champions 

Discuss DAF giving with your board members and top donors to recruit them as DAF Day champions for your nonprofit. Some organizations are also securing a lead gift to kick off their fundraising or a matching gift to motivate giving. Others plan to feature a donor’s story about why they use a DAF to encourage other donors to do the same. 

5. Kick off the year-end giving season with DAF giving 

You can use October 10 as a kickoff for your year-end giving season. By encouraging DAF giving on DAF Day, you’ll have a great list of donors to engage in customized outreach for your GivingTuesday and end-of-year campaigns.  

Take this opportunity to make sure your Candid nonprofit profile is up to date, so DAF donors can find your organization easily and learn about your mission and work. Keeping your profile updated will also help put your nonprofit on donors’ radar throughout the year. 

DAF fundraising is an incredibly valuable opportunity for nonprofits amid a broadly challenging fundraising environment. DAF giving is growing rapidly and DAF donors are proven to be more consistent, long-term supporters. Plus, it’s easier than ever for nonprofits to engage DAF donors by tapping into a sector-wide initiative like DAF Day and leveraging all the educational resources now available!     

Donors can learn more about how to become a DAF donor, how to pick organizations to support, and how to rally your network to do the same by watching the recording of Chariot’s September 26 webinar DAF Day for Donors: Show Your Network Why You DAF, which features Tracy Waksler, vice president of Growth at Candid.  

Photo credit: kali9 via Getty Images