Donor-Advised Funds (DAFs) may seem out of reach, but reports show that they are growing at a rapid rate. Furthermore, DAFs have been making a significant impact on giving. For instance, a donor recently found out that his DAF had the ability to support early education impacting 80 children. The fund that went out to support this cause was in the ballpark of $170,000. This was possible through appreciated securities and growth of the fund in their portfolio.
If your nonprofit has not been leveraging Donor-Advised Funds to supplement your fundraising strategies, following our recommended best practices can help you get started. Make sure you get a copy of our best practices guide at the end of this article.
But first, let’s start with the basics.
Amy Pirozzolo, Head of Marketing, Fidelity Charitable says, “A donor advised fund is like having a set-aside investment account just for your charitable giving.”
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DAFs are a way for donors to make a charitable contribution and get their tax deduction immediately. However, funds, securities, and assets are held by a public charity. The donor can then recommend grants to go out to charities from these assets.
Before we get to our best practice recommendations, let’s understand some commonly held misconceptions about Donor-Advised Funds.
|DAF donors are typically wealthy||The average DAF donor has a bank balance of $17,000|
|DAF contributions are always major gifts||Gifts have a wide range, but the average is about $4000|
|Money doesn’t move when it ends up in a Donor-Advised Fund||On average 37% of funds go to charities in year 1, 74% within 5 years and 88% within 10 years|
|DAFs are limited in number||Over 1000 charities have DAF programs|
Learn how best to fish in your own pond. Identify prospects for DAF giving from within your donor base.
Download our best practices guide here–>
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