Donor Advised Funds for Nonprofits: How to Get DAF Gifts

What a Donor Advised Fund Actually Is

If a donor tells you they'll "give from my DAF," would your team know what to do next? For a lot of nonprofits the honest answer is a shrug, and that's an expensive shrug. Mitch Stein, head of strategy at Chariot, a payments company focused on making donor advised fund giving easier, joined Trevor Nelson on the Hey Nonprofits! podcast to explain why.

Mitch's simplest definition: a donor advised fund, or DAF, is a tax-advantaged savings account for charitable giving. He compares it to a 401(k) or an HSA. Money goes in as cash or other assets, such as appreciated stock, and gets invested so it can grow. Then the donor recommends grants out to nonprofits over time. The contribution is irrevocable. Once the money is in the account, it can only go to an eligible nonprofit, and that changes how people think about it.

The idea isn't new. According to Mitch, the first DAF was created at the New York Community Trust in the early 1930s, with the goal of offering the benefit of an endowment that a donor could use for giving while alive. Financial institutions such as Fidelity Charitable, Schwab Charitable and Vanguard Charitable entered the picture later, and community foundations expanded their programs about 20 years ago.

Why DAFs Aren't Just for the Ultra-Wealthy Anymore

Ten years ago, Mitch said, DAFs were mostly a tool for the ultra-wealthy who wanted a simpler alternative to running a private foundation. That has changed. Many of the biggest providers now require no minimum balance, and minimum gift sizes have dropped to $50 at Fidelity and Schwab and $18 at Daffy. He added that GoFundMe recently launched a DAF on its platform with a $5 minimum.

The size of the opportunity is hard to ignore. Mitch cited industry data showing more than $250 billion committed to DAFs, five times the amount of ten years ago, and nearly $55 billion in grants made from them, up six times. In a DAF fundraising report Chariot produced with K2D Strategies, which analyzed historical data from 32 nonprofits, the median year-over-year increase in DAF revenue in 2024 was 30%, compared to a median change of minus 1% in non-DAF revenue. By his estimate, DAFs now account for close to 20% of giving volume.

He also shared that last year was the first year more money was contributed to DAFs than to private foundations. And while foundations are required to pay out about 5% a year, the overall DAF payout rate has been above 20% since tracking began. Money in a DAF tends to move, which is good news if you're the one asking for it.

Mini takeaway: DAF giving is the fastest-growing channel in philanthropy, and it's no longer limited to major gift prospects.

The Gift Card Effect: Why DAF Donors Give More

Mitch offered a helpful way to think about the psychology. A donor with a DAF is like someone walking into a store with a gift card. The first question is how much is on the card, and then they look for something worth that amount. The hardest decision, how much to part with, has already been made. All that's left is the joy of choosing where to give.

The research backs it up. In the Chariot and K2D report, the team looked at donors who gave to the same organization by credit card one year and then used a DAF the next. Mitch said the average increase in giving was 10 times, and the median was 2 times, meaning more than half of those donors at least doubled their support. He was careful to say it isn't the only factor, but given the scale, tens of thousands of examples, he finds it compelling. Fundraisers tell him the same thing: a $100 gift becomes $1,000, or a $200 gift becomes $2,000.

That's also why DAF donors make useful prospects. Mitch pointed out that even at Fidelity Charitable, the largest DAF provider, the median account size is close to $25,000. A first DAF gift of $500 may be coming from someone with far more set aside for giving. "That's someone that you want to have a really good relationship with."

Five-Second Fixes That Make It Easy to Give

Trevor asked the question most listeners were thinking: how do you make it frictionless? Mitch described a spectrum, starting with steps any nonprofit can take today.

First, put your EIN where it can be found. His test: go to your website right now and look for your EIN. "If it takes you more than five seconds, you've just lost a DAF donor." Donors searching their DAF portal are choosing from roughly 1.5 million organizations, and many search by EIN because legal names and marketing names often differ. Put it in the footer, on the About page, anywhere you like, and put your legal name right next to it.

Second, create a dedicated DAF page on your website. Link to it from mailers, emails and texts, and mention donor advised funds by name in your solicitations. The page can explain how DAFs work, give your details, and show donors exactly how to recommend a grant to you.

Third, check your fundraising platform. Many platforms now offer DAF payment as an option at checkout, similar to Apple Pay or Google Pay, and Mitch noted that Chariot has integrated with dozens of them. If yours has it, make sure it's switched on. If not, ask your provider about adding it.

Mini takeaway: Before you build anything new, find your own EIN on your own website. If it takes you more than five seconds, so will your donors.

Using DAFs at Your Event

Events and DAFs have what Mitch called a tricky history. Donors often assume a DAF can't be used at an event, and part of that is true. A DAF can't be used for anything that gives the donor a personal benefit, which includes auction items, tickets, and table sponsorships. But it can be used for general donations, such as a paddle raise, a fund-a-need appeal, or a QR code to give.

Mitch recommends saying so out loud. He said he'd attended about five fundraising events this year where the emcee mentioned DAF giving by name, and he called it helpful. He also suggested a separate QR code for DAF giving, next to your regular giving code, or using a platform that offers DAF payment at checkout. That solves a problem anyone who has run an event knows well: the donor who says they'll give from their DAF and then has to be chased for months.

He described a luncheon in Dallas with about 400 people, where a client placed a DAF QR code beside its general giving code. More than half of the room participated. Six people gave through DAF pay, and those six gifts made up about 40% of the fundraising. Three of the six were guests who hadn't donated before. Mitch's point was that events are full of first-time potential donors, and a DAF gift puts you in the flow for the following year.

Mitch also addressed the worry that mentioning DAFs might turn off donors who don't have one. His answer: if they're interested, you've taught them something, and if they aren't, it goes right over their heads. No harm, no foul.

Stewardship: The Part Most Nonprofits Miss

The most practical advice may be about what happens after the gift arrives. A DAF gift is technically sent by the DAF provider, such as Fidelity Charitable, a community foundation or the National Christian Foundation, which Mitch said is one of roughly 1,200 sponsors. But a real person recommended it. That means you have two parties to think about: the provider that issued the funds, and the individual donor behind the grant.

Mitch's first warning is about receipts. He said you should not send the donor a tax receipt for a DAF grant, because a gift from a DAF isn't tax-deductible to them, and a false statement to the contrary becomes your problem. (Check the details with your accountant, since Mitch also noted that every donor's situation is individual.) His second warning is about silence. Tie the gift to the donor's record if you can, and thank them as quickly as possible, even if it takes a little detective work.

Mitch shared two examples of what that attention is worth. One DAF provider's CEO told him about a fund holder who had been giving from their DAF to an organization for three years without hearing a word, and finally asked the provider to cancel the recurring grant. The nonprofit had assumed the gift came from the community foundation. In the other, the Michael J. Fox Foundation had a team member send a personal thank-you within hours of any DAF pay gift for three months, and more than 50% of those donors responded. "That is like unheard of for nonprofit thank-yous."

Mini takeaway: A DAF gift is a gift from a person. Find them, thank them quickly, and don't send a tax receipt.

You Don't Get to Decide If You're Ready

The line that stuck with us came when Mitch described a common objection: nonprofits who say they're not ready for DAFs. "That's not up to you," he said. The gifts will come, with or without a plan to track and thank those donors. The only choice is whether you're strategic about the fastest-growing channel in philanthropy or passive about it.

His starting point is measurement. If you don't know how much of your giving comes from DAFs, you can't tell whether you're behind the roughly 20% benchmark. Then check your website, your language, your payment options and your thank-you process.

If you want to keep learning, Mitch invited listeners to find him on LinkedIn, where he posts regularly about DAFs, and to use the contact form linked in the episode notes if they have questions about Chariot.

Insights in this article are drawn from the Hey Nonprofits! podcast episode “The Hidden Power of Donor Advised Funds (and How Nonprofits Can Benefit)”, featuring Mitch Stein, head of strategy at Chariot.