Donors who put money into donor-advised funds aren’t all that different from everyone else; they just have one more option for making charitable gifts. When they contribute to their funds, that money is earmarked for charitable use. With the recent news that Fidelity Charitable — the nation’s largest DAF sponsor — eliminated its $5,000 minimum requirement to create an account, use of the funds may become even more prevalent.
Fundraisers who want to tap into the wealth held in these accounts often feel like DAFs are a black box. Unlike foundations, the funds have no payout requirements. And the lack of requirements for transparency means it can be tough for fundraisers to figure out which of their nonprofit’s current donors already use the funds for their philanthropy.
The Chronicle has been following DAFs closely. We’ve talked to fundraisers who cracked the code on raising money from DAF donors, and you can learn from their advice.
Fish in Your Own Pond
Some savvy fundraisers have embraced the fact that DAFs are not going away any time soon.
“We’re going to have to kind of accept the fact that we can’t stop these donors from getting donor-advised funds,” says Rachel Earl, chief development officer at the St. Labre Indian School. “Our responsibility is to communicate with them on how to use that donor-advised-fund account now that they have it.”
St. Labre, which has donors in all 50 states, added messages to its direct-mail reply forms, email appeals, website, and newsletters telling donors that if they have a DAF account, the charity is eligible to receive those funds.
“You have to go fishing in your own pond,” Earl says. Many of your current donors likely already give this way, even if you don’t know it, she says. You find out they have a DAF either because you receive a gift or because they tell you.
In this story, I talked to fundraisers, consultants, and other experts about patterns in how DAF donors give and what fundraisers can do to connect with them.
Get Close to the Gatekeepers
It can be tough to cultivate DAF holders if you don’t know who they are. As a result, some fundraisers are investing time to build relationships with fund managers and program officers at sponsoring organizations — like commercially sponsored funds or community foundations — as well as with wealth advisers who help guide their clients’ charitable giving.
Chronicle contributor Kellie Woodhouse asked fundraisers and a few of these gatekeepers for their advice on how to make those connections with tact.
Christy Eckoff, the chief foundation officer for the Jewish Federation of Greater Atlanta, suggests charities focus their efforts on community foundations and other small and medium-size sponsoring organizations that have a local focus. Such organizations consider it part of their mission to develop an intimate understanding of the community’s charities and their donors’ preferences.
“To some extent, you steward these sponsoring organizations the same as you would the donor. Send them information periodically of what you are doing,” Eckoff says. “Program officers have limited capacity as well. The more that you can proactively send them things they can read on their own, the better.”
Some charities invite DAF middlemen to see their work first-hand. Guide Dogs for the Blind hosts representatives from sponsoring organizations for tours of its campuses, for example. These visits establish relationships that pay off when grant officers interact with DAF holders.
Talk to Donors About DAFs
The Pan-Mass Challenge is consistently on the list of charities that receive gifts from the largest number of Fidelity Charitable gift funds.
Former Chronicle writer Drew Lindsay spoke with PMC’s chief financial officer, Michele Sommer, about what the group does to achieve that kind of success. Participants in the cycling event, which supports the Dana-Farber cancer hospital, tend to be on the wealthier side. And it helps that the race is located in the same city as the brokerage giant.
But Sommer chalks up some of its success with DAFs to the purposeful steps it takes to educate donors — and riders raising money — about the funds.
The organization’s website features a page that details how the funds work. And when Sommer meets with riders to talk about how to raise money, she urges them to bring up the funds with potential supporters.
“You just have to really go for it and know that it’s just too big to turn your back on,” she says.
Learn From Other Charities’ Success
Sure, there are some best practices for appealing to donors who use DAFs for their philanthropy. But different charities bring their own strategies to the table. In a webinar earlier this year, three fundraisers shared their expertise and answered audience questions about how charities can become comfortable accepting DAF gifts and adjust their fundraising strategies to build ties with supporters who give that way.
The webinar featured Josephine Everly, chief development officer at the Leadership Roundtable, who led efforts to double revenue from DAF gifts last year at the nonprofit, which works to improve operations of the Catholic church in the United States. Everly previously worked as an adviser to donors who set up DAFs, and she shared tips for connecting with the professionals who counsel account holders and those who work at organizations that sponsor these funds. She also explains how to properly acknowledge DAF donations and avoid common legal missteps when handling them.
Tlisa Northcutt, senior director of donor relations at the University of Alaska Foundation, discussed ways to build strong ties with donors who set up DAFs. She also explained how to thank DAF donors and demonstrate the impact of their giving.
And, Rachel Earl, of the St. Labre Indian School, spoke about how to include the option to give through DAFs in all of your marketing materials on a variety of communication channels. She also shared examples of appeals and messages that have resulted in contributions through these funds.
I hosted the webinar and learned a lot from the conversation.
