Senior Gift Planning Consultant, Lynn Gaumer, J.D., CAP, joins the blog to celebrate the donor advised fund (DAF) and let you in on a new way to get the word out.
Mark your calendars: October 10—or 10/10 for short—is about to become a day to celebrate giving. It’s DAFday—a celebration that deserves a perfect 10 out of 10!
Never heard of it? That makes sense as it is the first-ever DAFday. So, what is it? According to the creators, DAFday is “a new kind of giving day that reframes how donor advised funds (DAFs) are used—and who uses them.” They cite two outcomes they hope to achieve with DAFday:
- Maximize the use of DAFs by creating a shared timeline to follow, a collective movement to join and a connected experience to get excited about.
- Increase awareness of the value DAFs offer to donors and nonprofits so that more people use them to expand their giving capacity.
Join the DAFday Movement
Here are three ways you can celebrate generosity and the impact of donor advised funds:
- Become a DAFday partner…and promote DAFday giving. You can sign up for a wealth of resources at dafday.com, including a sample letter you can customize for your supporters, social media images to promote the day, and a press release to get the word out.
- Plan your communications. Leverage your digital communications and social media. Drive your supporters to the DAF page on your planned giving website so they can learn more about this “charitable savings account.” Encourage your donors with DAFs to recommend grants equal to 10% (there’s that number again!) of their account on DAFday…or any other day of the year. You can also use DAFday as a launch date to promote DAFs through the end of the year. According to the 2024 National Study on Donor Advised Funds, 57% of contributions to DAFs are made in the fourth quarter while 32% of grants are made from DAFs in the fourth quarter.
- Spread the word. DAF together! (Yep, I used it as a verb.) Reach out to your colleagues and friends in the nonprofit community to encourage them to join the movement. Tell family and friends how DAFs can enhance their philanthropic efforts.
By participating in DAFday you can…
- Boost annual donations. Encouraging your donors to give through their DAF can nearly double their annual support to the causes they care about.*
- Tap into unused funds. With an estimated $230 billion set aside in DAF accounts, and 37% of these accounts left unused each year, there’s a substantial opportunity to access additional support for your mission.*
- Create an educational opportunity for your donors. Only 17% of the public understands what DAFs are and how they work, so DAFday provides a perfect occasion to educate your supporters about this valuable giving tool.*
- Enhance your marketing efforts. Only 58% of nonprofits currently mention DAFs in their marketing materials. Promoting DAFs can set your organization apart and attract more contributions through these accounts.*
A Perfect 10
Here are 10 reasons why the mighty DAF gets a perfect 10. A donor advised fund:
- Is easy to establish: Setting up a donor advised fund is quick and simple. The process can often be completed online.
- Makes giving strategic: Donors can plan their charitable giving in advance and make grants at a pace that aligns with their personal and financial goals.
- Expands giving options: Donors can maximize their giving by contributing a wide range of assets such as appreciated stocks, real estate or other illiquid assets.
- Saves on taxes: Donors qualify for an income tax deduction when they contribute to their DAF account.
- Avoids capital gains taxes: Donors who transfer appreciated property can avoid taking a tax hit.
- Offers flexibility: Donors decide when and how they donate. Whether it’s now or in the future, they are in control.
- Simplifies giving: Donors can manage all their donations from one account.
- Allows growth through investment: Contributions increase tax-free within the DAF account, potentially increasing the impact.
- Provides privacy: Donors can choose how they are acknowledged (or not) and which personal information they wish to share when making grants from their DAFs.
- Invites involvement of loved ones: Family or friends can participate in grantmaking by serving as fund advisors. Family members can also be named successor advisors to the fund so the next generation can carry on the donor’s charitable legacy.
If all those reasons aren’t enough, consider this:
- More than 322,000 Fidelity Charitable donors made 2023 the most impactful year to date, granting a record-breaking $11.8 billion to charities around the world.
- In fiscal year 2024, Schwab Charitable donors supported more than 141,000 charities recommending more than $6.6 billion in grants.
- According to National Philanthropic Trust, grants from DAFs grew 9% to $52.16 billion, a new high for grant dollars.
How to Spread the News About DAFs
According to Fidelity Charitable, about three-quarters of grant dollars are distributed within five years. Make sure your donors know that your organization accepts grants or recurring grants.
Consistently include DAF content in your communications. DAFs should be promoted not only on DAFday but throughout the year through a multichannel marketing strategy consisting of print, digital, social media and web.
Encourage donors to name your organization as a beneficiary. When creating a DAF, donors may select a succession plan to guide the sponsoring organization on how to make grants after their lifetime. One option is to name a nonprofit as a beneficiary to receive a percentage of the remaining assets.
Make the process easy. Think digital. Many nonprofits have a “Give Now” or “Donate Now” button on their websites. Traditionally, these are convenient ways for a donor to make a quick donation via debit or credit card. Given the explosion of DAFs, consider a third option: “Give From My DAF.” Give your donors the opportunity to recommend grants from their DAF accounts by including a DAF widget on your website. (If you’re a Stelter web client, you already have a widget on the DAF page of your planned giving website.) A non-digital option could be language on your reply cards that says, “I would like to make a grant from my donor advised fund to your organization.”
Take advantage of every opportunity. Don’t forget about the #HalfMyDAF movement, which has spurred over $50 million in gifts. This social media effort encourages people to give more from their DAFs. David and Jennifer Risher started the #HalfMyDAF movement to inspire generosity and have offered to give up to $2.1 million to donors’ favorite nonprofits. But the clock is winding down: Donors who have committed to spend down half the money in their DAF can submit grants for random matches. The first 2024 round of matches was done in June and the second is planned for September 28-29, 2024.
Let’s make October 10 a day of impactful giving and celebrate why DAFs truly deserve a 10 out of 10. Join the movement and make a difference today. Happy (upcoming) DAFday!