Attracting and Stewarding Donor-Advised Fund Holders

Donor-advised funds are top of mind for all of us working in fundraising, and those who choose to invest via a DAF should receive ample, individualized attention from organizations to cultivate their involvement over time. With DAFs on a consistent rise across the philanthropic landscape (according to the 2023 DAF Report from the National Philanthropic Trust, grantmaking from DAFs has more than doubled in the last five years – check out our previous post on Five Major Shifts in Fundraising Over the Last Five Years to learn what other areas you should spotlight) and many donors and organizations struggling to navigate this shift, attracting stewarding DAF holders in ways that address their specific needs and concerns should be a top goal in your stewardship plan. 

How are DAF holders different?

Individuals who give through a DAF are intentional with their giving and are philanthropically-minded. They want to invest in organizations whose missions they connect with deeply and often put forth effort to research and learn about both organizations in their community and what benefits they may receive from establishing a DAF. DAF holders are typically interested in giving to multiple organizations, so we advise strategic steps to bring them in the door as well as strengthen their trust in your work together.

Attracting DAF holders...

DAF holders (or those who can become DAF holders) may find your organization in many ways, and anticipating their needs and questions will greatly appeal to them. I recommend first and foremost ensuring that your forward-facing development communications (from your appeals to your website) speak directly to all the giving mechanisms a high capacity donor or prospect might be interested in, with attention to DAF giving. Language that invites the donor to connect directly with your fundraising staff if they are interested in giving beyond the typical cash, EFT, or check opens the door to more in-depth conversations and greater giving.  

As we alluded to above, you may have donors or prospects who are not far from becoming DAF holders. Being mindful of your donors' giving habits will prepare you for the eventual question of "how does a DAF benefit me (and your organization)?" and possibly even relaying "I have no idea how these things work." Those giving at a high level may feel especially comfortable bringing these wonderings to your fundraising staff. In navigating the challenge of not giving tax or financial advice to donors, yet still nurturing those who are interested in giving through a DAF, we advise leading with "do you have a tax advisor? They would be a great resource for you as you consider making changes in how you invest. If not, have you done any research on more sophisticated ways to give?" This can expand their curiosity and point them in the right direction while giving them an appropriate amount of guidance (and reinforce their trust in your organization) as they move toward DAF and other types of giving.

Your organization's digital and local footprint will also draw DAF holders your way. Consider those in your community that a high capacity donor might connect with around their charitable contributions and financial decisions: community foundations, lawyers, and tax and financial advisors. Having positive relationships with your region's community foundations ensures that when donors approach them to establish a fund, the foundation can direct them your way if your mission aligns with the donor's interests (this is also beneficial for estate gifts where a designation was not fixed). Your community foundations should know who your organization is and what you do – likewise, we recommend creating profiles online with major nonprofit search mechanisms a donor might use such as GuideStar to tap into additional established networks.

Stewarding DAF holders...

In stewarding DAF holders, I see a lot of organizational system challenges that can be modified to serve this particular demographic. While many organizations work wonders in their segmentation of recurring donors, those who give digitally, and first-time donors, I have yet to see segmenting DAF holders for any kind of communication or stewardship. If DAF holders are different (they research, they plan, they are intentional), then they should receive treatment that reflects the sophistication of their engagement with philanthropy and your organization. You may be thanking your recurring donors once a year, though with an investment from a DAF, more significant communication is needed to show your appreciation for their commitment as you begin to individualize their journey with your organization.

I recommend all organizations pause and thoughtfully consider how they are processing gifts they receive from a DAF, as I have seen these gifts missed time and time again. Many development teams don't create the bandwidth to discover who a more elusive DAF holder is (we've all received a mysterious letter at some point with no indication of gift provenance), if the information is available – and by the time they do, weeks have passed since the donor indicated their DAF dollars should be sent to your organization. I've seen a significant lag in DAF holders' receipt of their initial thank you from organizations, and I cannot emphasize enough the importance of speeding up your processes for showing appreciation toward these gifts.

Along these same lines, we advise educating your team beyond your development staff about DAF contributions – how the resources travel, the notion of "soft credit," and most importantly, who should receive a thank-you from your organization. Especially in larger organizations where information may travel to finance, development, and then to a volunteer, it is imperative that those reaching out with appreciation are given direction on who to contact. Adjusting your systems management and communication across departments and teams (beginning with accurate database entry) will ensure smooth and speedy gratitude is shared with your DAF holders.

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