Attracting Gifts From Donor Advised Funds - What's Your Strategy?
The popularity of donor advised funds (DAFs) has resulted in a national movement in charitable giving. In 2017 assets in these funds reached a record $110.0 billion according to a report from the National Philanthropic Trust. This explosive growth presents a tremendous opportunity for public charities to benefit from this pool of assets. However, unlike private foundations, there are no requirements for annual distributions from DAFs. Charities expecting to maximize DAF gifts cannot sit passively by waiting for DAF grants to arrive in the mail. Those charities that implement a proactive strategy to acquire DAF gifts will develop another stream of income likely to increase over time.
Here are the elements of a strategy to grow gifts from donor advised funds.
Gifts from DAFs are soft credited to the donors who suggested grants from their fund, in some cases to support designated programs. Ensure that information fed into your database can respond to queries for who made DAF gifts, and for which programs. It can be difficult to match DAF gifts with the donor advisor. Encourage gift officers to advise when expecting a grant from a DAF.
Perform prospect research for donors who make grants from a donor advised fund. Some fund sponsors allow DAFs to be established for as little as $5,000, so not every donor advised fund donor has capacity, and not every fund is the proverbial pot of gold. Nonetheless, those with DAF accounts are generally wealthier and philanthropically inclined.
Develop a communication and stewardship plan for those donors known to have a DAF. This includes direct mail, electronic, and in-person communications to encourage gifts from these funds and to learn more about the assets in the funds. Testimonials from DAF fund owners in development communications can heighten the awareness of this type of charitable giving.
Gift Officer Portfolios
– If not already prospects, add DAF donors to gift officer portfolios for qualification visits and to learn more about their DAF. Remember, the donor has made grants from their DAF to your organization, so the donor knows you are aware they have a DAF. This is not information your research department discovered on the dark web.
Major Gift Asks
Include grants from a DAF as part of a blended gift ask, even if you do not know the amount of assets in the DAF. You likely will learn more about the size of the DAF as you negotiate the ask. The DAF assets have to go to a public charity, so they are just waiting for a charity to ask, which should be your organization.
DAF sponsoring organizations may require that the DAF owner name those public charities to receive assets left in the fund at the donor’s death. Ask DAF donors to include your organization as a beneficiary, which will give your donor entry to your legacy society. Again, these funds ultimately must be granted to public charities.
Donor advised funds are growing by billions of dollars every year. Some charities have proactively pursued these gifts, and they have benefitted. Those charities likely have a strategy. Does yours?