If not, you’re likely leaving money on the table.
A lot of it.
2020 fundraising is not like 2010 fundraising.
There’s a huge new source of potential contributions remaining largely untapped.
Today, your fundraising strategy should add a new target donor constituency to your mix:
- Donor advised funds
Do you receive donor advised fund grants? Terrific!
Do you actively solicit donor advised fund gift recommendations?
If you answered ‘no’ or ‘not really,’ that’s not so terrific.
Money is flowing into donor-advised funds at a record-setting pace.
And I’m not talking millions, but billions!
In March, April, May and June of this year, dollars granted from DAFs increased by 159% over the same time period the previous year (per National Philanthropic Trust).
The 2019 – 2020 fiscal year saw astoundingly large dollar increases in DAF distributions over the previous fiscal year
- 54% — National Philanthropic Trust (NPT)
- 44% — Vanguard Charitable
- 39% — Fidelity Charitable
- 33% — Schwab Charitable Fund
Much of this uptick is in response to current events; some is in response to changes in the U.S. Tax Law in 2017.
While you may know donor advised funds as a mainstay of community foundation giving for generations, the popularity of this giving vehicle has exploded over the past decade.
Today it’s not just foundations. And it’s not just faith-based or issue-specific organizations. Large financial services institutions have entered the field, creating their own 501 (c) (3) spin-offs to manage such funds.
They’re big. They’re convenient for donors. And billions of dollars have poured into the largest ones at Fidelity Charitable, Charles Schwab Charitable, Vanguard Charitable and National Philanthropic Trust.
The demographics of folks who create their own DAF may surprise you.
Per Aspire Research Group Millennials opened 13% of DAFs in 2019 compared to only 6% in 2014.
So they’re not just for seniors.
They’re also not just for the mega-wealthy.
They can be opened many places for as little as $5,000.
Who DAF donors give to may surprise you as well.
For example, 74% of grants from Fidelity Charitable went to nonprofits the donor had supported in the past.
25% were pre-scheduled or recurring gifts.
And 60% of grant recommendations were unrestricted.
The types of assets donors use to fund DAFs is another important consideration.
For example, 64% of gifts to Schwab Charitable in the last 4 last four months were non-cash assets, including appreciated stocks and privately held business interests.
Some DAFs also accept real estate gifts and cryptocurrencies.
If your nonprofit doesn’t accept these forms of giving, you’ll want your donors to know there is another way they can give these assets and still benefit your charity.
What to do to get your share of the DAF pie
Today’s article won’t be lengthy, as I’m covering this subject matter in detail at an upcoming webinar on Wednesday (capacity already maxed out at 1000+) and an encore presentation the following Wednesday (you can still catch that one).
I’m writing today because I know a lot of you hate the fact DAFs exist. Critics argue they siphon off money that should go directly to charities, and since they aren’t required to make minimum annual distributions, money can sit idle in these funds.
It’s true, but… do you really want to throw the baby out with the bath water?
I don’t think you should, and I’ll explain why in my upcoming webinars. I’ll also describe strategies to encourage more of these dollars to find their way to your nonprofit. Now, more than ever, it’s time to set yourself up for success in every area of philanthropic giving. If you don’t, you’re just hurting those who rely on you and your fulfillment of your mission.
“Donors identified urgent needs that the coronavirus pandemic created and responded swiftly to support charities in most every philanthropic sector, including public society benefit, human services, international affairs and education.”
— Eileen Heisman, CEO of National Philanthropic Trust.
“It’s really important to send the message that the need is dire and that DAF holders are in a unique position to jump in.”
–Vanguard Charitable President Jane Greenfield.
If you can’t attend, sign up anyway and you’ll get the recording.
And if you’re not already enrolled as a Clairification School student, join us now and get access to all my webinars, articles and much more for the next 12 months!
Image by John Hain from Pixabay
Excellent presentation. Even as a very senior fundraiser, I follow you and your insights.
Thanks for your kind words Jerold. Happy to help!