How Your Charity Can Maximize the Power of Donor Advised Funds

Many nonprofits approach fundraising from Donor Advised Funds the wrong way. There is a right way and I’m going to tell you exactly how to do it.

Step 1: Ask your donors if they have a donor advised fund.

If they say “yes”, you should be excited. This person is intentional about charitable giving AND has set aside money that can only be used for charitable giving. Treat them like someone with their own family foundation. It’s not that different. Additionally, ask them “would you consider requesting a grant to our organization”. They may already be giving to your organization from their fund, but in an anonymous manner. This could be the conversation that prompts them to disclose that they are behind some of those mystery DAF checks your organization has received.

Consider asking them if someone close to them has a donor advised fund. They may not have a DAF, but a family member may. Imagine if one of your younger donors approaches her grandmother and asks, “Grandma, would you consider requesting a grant from your fund to XYZ charity?”. Do you think grandma is going to say no? Probably not. She’ll be thrilled to have a conversation about giving with her grandchild and more than happy to request that grant.

Step 2: Let people know they can request grants to your organization.

In your annual appeal letters, you probably have check boxes for Cash, Check, and Credit Card. What if you add an additional box for “Request Grant From My Donor Advised Fund”. It’s one more touch to remind the reader of that additional way to give.

PRO TIP: Consider adding additional giving options on your annual appeal letters for:

Gift of Stock
Qualified Charitable Distribution from my IRA
Request a Grant from My Donor Advised Fund

Many people haven’t considered these ways to give and are likely to do some internet research to find out more.

Step 3: Remember you’re not the only game in town. Most people give to more than one charity.

If they want to donate a valuable non-cash asset to charity, they may very well want to use it to benefit multiple organizations. Donor Advised Funds accomplish that perfectly. They can accept the asset, liquidate it, and then send the sales proceeds to several of the donor’s favorite charities. Start a close relationship with your local community foundations so that you understand their DAF policies. That way, when one of your donors wants to use a non-cash asset to benefit multiple charities, you can be the one to help make that happen. Introduce them to your friendly neighborhood community foundation and the concept of the Donor Advised Fund. They’ll be impressed with your ingenuity and preparedness.

Community Foundations can also be wonderful helpers when it comes to your organization’s fundraising. Many of them offer Endowment management, Charitable Gift Annuity and Charitable Trust management. Many also offer DAFs for charities! Yes, your charity can establish a fund at a community foundation to receive contributions to it directly from donors. You might consider doing this to receive non-cash gifts that you don’t feel comfortable accepting yourself. You may also consider doing this to take advantage of the high-quality investments they may have access to that you don’t.

Many people have little awareness of the vast service and support that their local community foundations provide for both donors and nonprofits. Explore these options. You’ll be glad you did.

Find your local community foundation using the Community Foundation Locator powered by the National Council on Foundations.

I hope this article has helped you to understand Donor Advised Funds in more detail and has given you some ideas you can use right away to begin partnering with DAFs for your organization’s benefit.