The charity most people know as St. Jude Children’s Research Hospital is one of the largest in the world, raising $2.4 billion in its 2023 fiscal year, according to its most recent 990. Part of the organization’s fundraising strategy involves courting donor-advised fund holders, says CEO Richard Shadyac Jr.
“We’re shifting our strategy more and more to make sure that we meet people where they are,” says Shadyac, who is stepping down in March. “Donor-advised funds are incredibly popular. People have already decided that they want to have a donor-advised fund. So you want to meet them there.”
Many charities know about the promise of donor-advised funds and want to capitalize on it. St. Jude does. Shadyac would not share the total amount St. Jude brings in from DAFs, but did discuss how the organization finds and secures these donations.
Getting the Word Out
The easiest of St. Jude’s DAF tactics to replicate is simply telling people they can donate from the accounts. “For every charity, it’s important that you let the world know that you accept donations from donor-advised funds,” Shadyac says. Nonprofits can get the message out on website donation pages and newsletters, as well as through in-person conversations.
St. Jude steps it up a notch in three areas: connecting with financial advisers, data tracking, and messaging. “We engage with lawyers and estate planners and accountants and financial planners,” Shadyac says. This includes going to conferences these professionals attend and carving out relationships with big financial organizations like Fidelity and Schwab. The organization’s goal is to educate the professionals about St. Jude’s efficacy as a charity, showing why it is a good investment for clients looking to do good.
St. Jude also tries to “get as much information as we possibly can,” in order to “be very personalized in our messaging,” Shadyac says. The group tracks who in its donor base has DAFs and who’s expressed interest in them, which allows the organizations to tailor messaging to individual donors, he says.
Third, the charity uses the language of investments and returns when talking to both donors and financial professionals.
“We shouldn’t be saying, ‘Hey, why don’t you give to us from your donor-advised fund?’” Shadyac says. “What we should say is: ‘If you’d like to make an investment into St. Jude Children’s Research Hospital, can we talk about the best ways to make that happen?’”
People with DAFs, he says, often view their giving as “an investment to further the mission that they are supporting.”
St. Jude’s approach is similar to what other organizations pursuing DAF donors are doing, says professor Genevieve Shaker. As part of research she is conducting but has not yet published, Shaker interviewed almost 50 fundraisers about their strategies to win gifts from people with DAFs, and their answers mirrored some of St. Jude’s approaches.
“They tried to build relationships with their community foundation, with wealth advisers in their communities, with philanthropic advisers to become more visible to the sponsors,” says Shaker, who teaches philanthropic studies at Indiana University Lilly Family School of Philanthropy.
DAF Donors Are Changing
St. Jude, like other charities, is getting donations through DAFs not just from the ultrawealthy, but also from small and midsize donors.
“We see the whole gamut, but I do think increasingly it’s becoming more of a middle-income option as they see the benefits of that giving vehicle,” Shadyac says.
One such donor who isn’t giving millions through his DAF, but is giving steadily, is Dr. Vernon Rayford, who established a DAF with his wife. They contribute $425 monthly to their DAF and dole the money out to a variety of charities throughout the year, including St. Jude.
“We give to local charities in our community,” Rayford says, noting they also give to a nursing association and a pediatric free clinic.
Rayford, who trained in internal medicine and pediatrics, has seen throughout his career the toll having both extensive medical bills and a sick child can have on a family. He admires the St. Jude approach, which guarantees parents will never see a bill so they can focus on being present for their ill child. While Rayford initially got involved with St. Jude to run a race, the organization’s messaging and tailored outreach got him more deeply involved. In particular, one of St. Jude’s advisers reached out to Rayford and began sharing the work the hospital does in the area of sickle-cell research and care. St. Jude asked Rayford, who is Black, to make a gift to a program that honors one of St. Jude’s first Black doctors, who pioneered innovative sickle-cell treatments.
Now that he’s been donating through a DAF for three years, Rayford has come to love the ease of the process.
“It’s a very durable way of giving,” Rayford says. “Another upside is its convenience around tax time. You don’t necessarily have to cobble together the check stubs and gift acknowledgments from the myriad of places that you support.”
This broadening of DAF donors is being seen across the field, according to Shaker.
“Everybody said they’re getting more DAF gifts now than they did in the past,” she says. “They are seeing a broadening in the group of donors who are using DAFs. As more people have started to use DAFs, they are seeing more people who don’t fit that stereotype [of being ultrawealthy].”
Be Ready for DAF Supporters
More new-to-DAF donors are coming into the field, and Shaker says some of them are looking to charities to help advise them.
“People are getting DAFs because their financial advisers say, ‘Hey, you really should do this,’” she says. “And then people are like, ‘Oh, now what?’”
In her research, Shaker found that fundraisers felt they had to have a good base of knowledge about DAFs to talk to donors who had questions, as well as to talk to donors who were “very sophisticated” in their DAF use.
“These donors seem more savvy,” she says. “They spend time thinking about their philanthropy.”
