Quick—try to name the organizations that attracted the most charitable support in 2015. Chances are you might have come up with some well-established national charities like United Way or The Salvation Army, or maybe a major university like Stanford. Those are all good guesses as each raised over a billion dollars and cracked The Chronicle of Philanthropy’s top 10. But there was a new No. 1 this year: Fidelity’s Charitable Gift Fund.
Fidelity’s takeover of the No. 1 spot is just the exclamation mark on an unmistakable trend that has unfolded over a number of years—the rise of the donor-advised fund (DAF). DAFs often attract the ire of nonprofit professionals. Funds that could be given directly to worthy organizations sit in accounts collecting management fees for the owner.
But it’s undeniable that donors have indicated a clear preference for this type of giving, contributing $4.6 billion to the Fidelity fund, and another $2.1 billion to Schwab’s DAF offering. DAFs offer attractive options for donors who wish to offset a high income/tax event, like the sale of a business, or convert noncash assets like stock or real estate to charitable gifts.
Here’s some steps you can take to help attract some of the billions of dollars distributed from DAFs each year:
- Educate your front-line fundraisers on DAFs and how to talk about them with donors. There are some intricacies, such as not being used for pledge payments or tangible benefits (like a table at a gala) that fundraisers should be aware of.
- Raise awareness that you accept DAFs by including them in your list of giving options on all fundraising materials, alongside things like stocks, estate plans, etc.
- Highlight donors that give via DAFs in newsletters and other marketing materials.
- Be sure that gift acceptance policies and procedures include how to handle and recognize gifts from a DAF.
- Consider facilitating online distributions from DAFs by including a DAF Direct on your giving or DAF page.
DAFs can inevitably cause some headaches, especially when it comes to identifying and recognizing donors, but are now too big of an opportunity for any nonprofit to ignore. So resolve to take some of the steps above to attract more DAF dollars in 2017!
Shocking Statistic: At over $3 billion per year, the Fidelity Charitable Gift Fund is the second largest grant maker in the U.S., behind only the Bill and Melinda Gates Foundation (Fidelity).
AMPERAGE Fundraising Advisers is a full-service fundraising company whose mission is to move the needle for our clients. For more information on Amperage Fundraising Advisers or to make a recommendation for a future blog post, contact us today!