Here at DAFinitive®, we were busy all year finding funds, donors and sponsor organizations to help make your donor advised fund research more robust. We are also regularly tracking industry news so that we can help you keep up on the world of donor advised funds. Check out our online DAF Research Center anytime to find news articles, annual reports and the latest research!
As we begin a new year, I thought I would highlight some of my favorites from 2024:
Industry Research
Throughout the year, I’m a big fan of Freewill and their informative webinars and reports. Their 2024 DAF Report was no exception. Some of their points were well-known if you’re familiar with DAFs, such as the importance of DAF giving is growing across our industry, while at the same time fundraisers are still struggling to identify the donors advising DAF gifts.
However, several other points were new. Despite the lack of donor identification, nearly two-thirds of fundraisers view DAFs positively and many respondents to the survey felt that DAFs ensure more money goes to working charities. Over this past year, respondents also reported big jump (up 12% since 2022) in actively soliciting DAF gifts!
On the other hand, the largest challenge reported by fundraisers was general unfamiliarity with DAFs, including how to ask for gifts from them, how to find them, and how to process them. As DAFs become more familiar to the nonprofit world, hopefully this will get easier.
Another useful report this year came from Chariot. One of the most interesting things to me in their report, was that those who gave via DAFs typically give more than those who donated via traditional methods (credit card, check, etc.). And, in contrast to traditional methods, which have seen a decline in donors in recent years, DAF donors are increasing as the years go. From a prospecting perspective, an important point that they made is that DAF donors are in your database — they just need to be identified!
Many of us eagerly await the National Philanthropic Trust’s annual DAF Report because of the comprehensive picture it gives of the state of DAF giving each year. The 2024 report was no exception. Helen Brown prepared a great summary in her recent DAFinitively Speaking blog post of the more salient points.
An additional item of note is the NPT report’s glossary, which for those less familiar with DAFs, is a helpful tool that summarizes the terms associated with this area of the industry so that fundraisers can familiarize themselves with them.
Inequality.org considers DAFs from an alternate view. In its publications, the organization regularly calls for greater transparency from sponsor organizations regarding several issues, including the average income of those using DAFs, how the funds in DAFs are being spent, and how long it takes for the funds to get to their recipients after distribution requested are received by sponsors.
Technology and Tools
The way donors use their DAFs is changing. New platforms and features are letting donors collaborate more extensively with sponsors to meet their philanthropic goals. Here are a few examples:
Technology company Tifin operates their own philanthropic platform, called Tifin Give. They recently launched a campaign feature that integrates social engagement into a donor’s giving. The new feature allows donors to share their gift intentions through social media, email, text, etc. and then invites others to contribute as well.
The Donors’ Fund, a fee-free DAF sponsor, promotes their automation and organizational tools to help donors at tax time by organizing all donations into one receipt at end of the year. They also work with many leading financial companies, allowing donors to give via their portal, a branded card, a personal check or through a mobile application.
Similarly, Chariot’s DAFPay works with nonprofits to streamline DAF giving through a button that can be installed on an organization’s website. They provide an application that allows the donor to select their sponsor and quickly make a gift.
Advocating for DAFs
The way DAFs are recognized in the world of philanthropy is also changing! 2024 was the first-ever DAF Day. The brainchild of Chariot and others, DAF Day sought to help donors rethink “how donor advised funds are used- and who uses them.” The goal of this new giving day was to maximize DAF usage and awareness, thereby increasing the number of donors who use them in their philanthropic goals.
Per Chariot, more than 1,200 nonprofits and several dozen sponsor organizations participated and many reporting record levels of donor participation and giving. Similar to the annual Giving Day tradition, the organizers behind DAF Day already have 2025 planned.
As of the writing of this post, Chariot noted that they will be releasing further data and research behind this first event and it will be really interesting to see feedback from participants and how it informs next year’s event!
To this observer, DAF Day builds on the momentum of the HalfMyDAF movement, which encourages donors to spend down half of their holdings by September of each year. HalfMyDAF’s matching gift lottery, which randomly selects grants to receive a portion of the nearly $2.1 billion contributed by foundations and donors, offers extra incentive.
Could these two movements work together and have DAF Day be the culminating event in a year of spending down? It remains to be seen, but it could bridge the gap between larger and smaller DAF donors. Either way, both movements are making DAFs commonplace and accessible.
Lastly, many of us followed progress on the ACE Act here in the U.S. to see if further regulation on DAFs would occur. Originally proposed in late 2023, regulations include specific guidelines for who a donor’s advisor (a.k.a. the person that sets up the fund, advises on it, provides financial advice or serves on an advisory committee) can be, as well as how they can operate.
A public comment period, which ended in February 2024, included more than 150 organizations. And, in May 2024, the IRS held a public hearing where three dozen speakers were heard.
While that seems unlikely that these proposed regulations will be enacted in the new year, The Regulatory Review offered an interesting roundup on international proposed DAF laws and how the U.S. might approach them in the future.
So, those are my highlights and now we set our sights on 2025!
What predictions do you have for 2025? Do you anticipate further legislation or calls for transparency? Do you think DAF donations will continue to rise or soften? What resources would help you, your organization or your donors work with DAFs more effectively? Let us know! We’d love to hear from you and maybe it will become a future DAFinitively Speaking topic? Email us at hello@dafinitive.com.
