We’re learning more about people who have donor-advised funds and what makes them tick.
Account holders tend to give from multiple sources — not just their DAFs. They may be good candidates to approach for planned giving. And when DAF account holders donate anonymously, they often do so to avoid making their gifts public, not necessarily because they want to hide their identity from the charity. That’s all according to new research from the DAF Research Collaborative.
The new report, “National Survey of Donor Advised Fund Donors”, is one of the first to provide data from a large number of DAF donors. More than 2,100 responded to an 89-question survey that asked about their demographic information, giving habits, and understanding of DAF policies.
“This report does provide some pretty good evidence that when a donor has money in a DAF, they are thinking a little bit more strategically about their giving,” says Dan Heist, assistant professor of public administration and nonprofit management at Brigham Young University and one of three authors of the report. “They are intentional about it.”
DAF Donors Are Similar to Other Donors
With the rise in popularity of DAFs, many fundraisers wonder if people with DAFs are different from other donors, but the report found that in many ways, DAF donors are similar to others. The donor-advised fund is just a method they use to give.
“There’s a lot that’s in this donor survey report that simply should remind fundraisers that the basic fundraising 101 works as well for DAFs as it does in every other situation,” says Jeff Williams, director of consulting services at the Dorothy A. Johnson Center for Philanthropy and an author of the report.
DAF donors in the survey were more likely to give to a few favorite charities than to new ones. Six in 10 said that more than three-quarters of their DAF grants went to the same charities year after year. Thirty-five percent said they never or almost never gave to new charities, while the remaining 65 percent said they occasionally did.
“I suspect if we did a study of people who give cash versus people who give checks versus people who could give stocks, we’d also find that a majority of their gifts go to charities that they already have a relationship with,” Williams says.
DAF donors had similar reasons for giving as other donors. They saw it as their duty to give back (74 percent), they had a special connection to the organization (71 percent), it gave them personal satisfaction (67 percent), they wanted to create impact (63 percent), and they wanted to make a difference in their local community (59 percent).
The average age of DAF donors in the survey was 67, and 61 percent were retired. They were also wealthy: Seventy percent had an income of $200,000 or more, and 22 percent had an income of $100,000 to $199,000. Sixty-two percent had a net worth of more than $5 million, while 33 percent had a net worth of $1 million to $4,999,999.
The authors note one of the limitations of the survey is that it reflects the people who were willing to complete the lengthy questionnaire, and that may not be representative of all people who have DAFs. Demographically, 94 percent of the respondents were white, 66.6 percent were male, 32.9 percent female, and 0.5 percent were nonbinary or other.
“I do think DAFs are being used by a wider population than those who answered the survey,” says Heist, who recommends against targeting donors based on the demographics of the survey. “The best advice for each organization trying to find those who use DAFs is to look at their own database.”
New Data on DAF Donors
While DAF donors share many characteristics with other donors, some qualities emerged in the research that can help nonprofits interact with them.
They give in multiple ways. DAF donors tend to give from a variety of sources. Almost as many make direct gifts, such as cash (88 percent), as contribute from their DAFs (94 percent). They also give stock or contribute from their IRA or through giving circles.
“Donors have multi-pocketed giving strategies,” says Danielle Vance-McMullen, an assistant professor focused on donor behavior and fundraising at DePaul University and a study author. The survey data noted that many donors reserve DAFs for large gifts and contribute by other means when donating smaller sums or attending a charity event.
The fact that donors give in multiple ways also turned out to be a clue to why they sometimes stop giving from DAFs, Vance-McMullen says. For example, sometimes they gave from their DAF until they turned 73, at which point they had to take a required minimum distribution from their retirement plan. Rather than pay taxes on that distribution, they donated it to charity.
“So they’re not stopping their giving,” she says. “They’re changing their giving vehicles for a time.”
When donors switch strategies like that, fundraisers can nudge them by reminding them about the DAF and asking if they have giving plans for it, Vance-McMullen says.
Ask to become the DAF beneficiary. The lion’s share of donors in the survey — 92 percent — said they have a succession plan in place for what happens to the DAF after they die. But the survey indicated some might be open to changing it, the report says.
“There’s really a lot of room for fundraisers to have this conversation with DAF donors,” Heist says, noting many account holders fill out the successor information when they open their DAFs. “When we asked them about future planning and what’s ahead, a lot of them didn’t really have a clear idea. They have a strategy for how they’re going to use it right now. A lot of donors might not even have thought about, ‘Oh, I could leave a gift to the charity in my succession plan.’”
Asking the donor to make the nonprofit a beneficiary is a great option because donors aren’t choosing between leaving that money to family members or leaving it to a charity, Williams says.
“I’m hoping this donor survey report is a prod to nonprofits and planned-giving officers,” he says. “Go chase people with legacy balances at DAFs precisely because the decision about what channel to put the money down was already made. That money, by definition, cannot go to my kids. It’s looking for a charitable home.”
What anonymous donors want when they seek confidentiality. One complaint fundraisers often make is that they don’t get donors’ information from the DAF sponsor. However, the survey found most donors don’t want to be anonymous. Only 28 percent regularly send completely anonymous grants, and 39 percent send partially anonymous grants — offering some information, like the fund name, which might not be identifiable.
Of those who gave anonymously, 72 percent said one reason was they didn’t want public recognition for their gift.
“There’s a general confusion among donors about the differences between being anonymous to the charitable organization and being anonymous in public reporting,” Vance-McMullen says. “Anything that fundraisers can do in their materials or in their conversations to help donors realize the difference between those two is probably really useful.”
Stocks are a big source of contributions to DAFs. Seventy percent of donors in the survey contribute publicly traded stock to their DAFs. Given the current market volatility, this could have implications for how much donors contribute to their DAFs.
Williams says the good news for charities is donors tend to make contributions toward year’s end, so the recent market turbulence with huge swings when tariffs were announced and then rescinded may not ultimately affect DAF contributions.
“Tell me where the stock market is in November and December, and that’s when I’ll tell you if giving stocks to DAFs is going to go up or down,” Williams says.
He added that grants from DAFs tend to be relatively stable, even in a turbulent economy.
Donors vary in their long-term strategy. The research also found that donors had different strategies for how they planned to dole out money from their DAFs. Just over half — 53 percent — said they wanted to give it all during their lifetime and therefore made regular grants from it. Only about a fifth — 19 percent — of donors said they plan to give away the funds currently in their DAFs as soon as possible.
A significant portion of donors (69 percent) said they wanted the funds in their DAFs to grow.
“Most people who have DAFs are thinking, ‘I’m going to use this over a few years,’” Heist says. “‘I’m going to be having a little bit of a strategy for longer term.’”
The good news for nonprofits is most donors said they have compassion for people in need today (90 percent) and enjoy seeing an impact on causes they care about (87 percent). This suggests they may be moved to support causes when nonprofits share the problems they are trying to solve and the impact the gift could have.
