Donor Advised Funds (DAFs) have a mysterious reputation. They don’t often appear in traditional grant databases, they aren’t technically grants, and nonprofits often don’t know how to find them. They stay quiet, give generously, then disappear again. Does that make DAFs the Keanu Reeves of philanthropy? Helpful, impactful, low profile, and unlikely to announce themselves with fanfare.
What’s a DAF?
A Donor Advised Fund is a charitable giving account held by a public charity or financial institution. A donor contributes assets into the account, receives the tax benefit immediately, and later recommends funding to nonprofits over time (Source: National Philanthropic Trust). Unlike foundation grants, you usually don’t apply to a DAF; the donor selects you. If this feels hard to track, that’s because it is. Like Keanu quietly paying someone’s tuition or giving away his earnings without press, DAFs do their work with minimal noise. (A lot of grants work this way, too, but that’s a discussion for another post.)
How Much Money Are We Talking Here?
DAFs are growing in popularity. Consider this. In 2022, DAFs:
- Held nearly 2 million individual accounts
- Distributed approximately $52 billion to nonprofits (Source: Philanthropy News Digest).
Compare that to the $105 billion given by foundations and $319 billion given by individual donors the same year (Source: Indiana University). Total assets in DAFs reached approximately $229 billion, but…only 7% have assets of $1 million or more. Half have assets less than $50,000 (Source: Johnson Center for Philanthropy).
What’s The Difference Between a DAF and a Foundation?
Foundations are required to give out 5% of their investment income each year, but there are no minimums for DAFs, and the transparency of giving is significantly less under the law than it is for foundations. This makes DAFs a little controversial—like Keanu in his Knock, Knock era maybe?–but they are one of the fastest-growing vehicles for charitable giving in the United States.
How Do Nonprofits Connect with DAFs?
Because DAFs are donor-controlled, access happens through relationships, not usually grant applications. So, what’s a nonprofit to do? Start here:
- Make it visible that you accept DAF gifts. Add a “Give through your Donor Advised Fund” option to your website and donation page.
- Ask your board, donors, and supporters if they have a DAF or know someone who does. Many donors use a DAF without mentioning it.
- Build relationships with community foundations, financial advisors, CPAs, and estate planners. They help donors decide where to give. Just like Keanu does not show up to just anyone’s event, a DAF donor rarely invites a nonprofit into their world without a warm introduction. A personal connection matters and your supporters can help.
Can Tech Make this Easier?
Tools like DAF Direct and DAFpay let donors initiate a DAF gift directly from your website. They require some setup and internal infrastructure to work efficiently, so investigate these options with your organization in mind. They are useful when:
- You believe you may have DAF donors in your audience.
- You already have solid online engagement.
They are not useful when a nonprofit is still building awareness or donor traffic. There are better things to spend your time on at that stage. A widget makes giving easier, but it does not make donors appear.
How Does Transcend Advisory Group Help?
DAFs function more like major gifts than grants, but donors may still request program descriptions or impact documentation. Transcend Advisory Group supports nonprofits by writing materials required by a specific DAF donor or sponsor, providing coaching for cultivation, and managing DAF retention as part of your overall grant strategy and calendar.
DAFs don’t stay hidden once you know how to approach them. Build the relationships, make giving easy, and the Keanu of philanthropy shows up when it matters.