Sneak Peek: The Democratization of DAFs

What if one of the best things you could do as a fundraiser was open a Donor Advised Fund yourself?

In her upcoming AFP Global Advancing Philanthropy article, Sari McConnell explores why DAFs are no longer reserved for high-net-worth donors and why fundraisers have an opportunity to become stronger Generosity Guides™ by understanding how donors give strategically.

Enjoy this exclusive preview of Sari’s upcoming article, available in full this fall.

The Democratization of DAFs

Donor Advised Funds have a reputation problem.

They're a parking lot for wealthy donors who want a tax break. They're the darling of bad press — criticized for having no required payout rules and trustees who can block donor grant requests to charities under investigation. They're elitist, only something high-net-worth individuals have access to through their wealth managers.

So what if I told you that one of the best things you can do as a nonprofit fundraiser is to open one yourself?

In the past few years, the DAF marketplace has quietly matured into a robust landscape that's accessible to every intentional donor, not just the wealthy ones. Today, you can open a DAF with one of the most recognizable online providers for $36 a year, which allows you to grant as little as $18 to the nonprofit of your choice. No minimum deposit required.

Of course, there are other options with higher thresholds and more service — community foundations, religiously affiliated institutions, financial institutions that bundle a DAF with your brokerage account. But the point stands: we're witnessing the democratization of the DAF before our very eyes.

Why This Matters for Fundraisers

Here's the thing, though. Most of us don't have an intimate relationship with DAF giving. A DAF check doesn't give us the same instant gratification as a credit card donation, does it? Our Ways to Give page includes the option, and increasingly so does our gala fund-a-need verbiage — but it's not an active part of the donor conversation. Certainly not one-on-one.

We all have the shared experience of giving by credit card to our favorite causes. Most of us can't say the same about giving by DAF — and that unfamiliarity is exactly what makes it feel foreign and unconversational as fundraisers.

But research makes plain that wealth giving is exactly how nonprofits grow fastest. And new tax provisions are about to make the DAF conversation more urgent than ever for your major donors.

So if we're serious about putting our organizations on a real growth path, I say we bet on this frog and jump in with both feet.

Here's why... Full article coming this fall. You won't want to miss it.