I explained Donor Advised Funds — and how they’re used by donors — in my last newsletter. Here I want to offer some perspective for fundraisers and non-profits looking to avail themselves of some of that DAF money, because, well, it’s not being done so well right now.
Recently we hosted a fundraiser for Sharsheret, a peer-support organization to help women diagnosed with breast cancer. We’ve hosted many events for non-profits over the years, and we receive invitations to buy tickets or sponsorships for non-profits regularly. Of the hundreds of solicitations I’ve received, none of them — until now, with Sharsheret — have listed “Donor Advised Fund” in the list of ways you can donate to them. On this particular invitation/payment card, not only was it listed, but it was listed just like cash, check (ha!) or credit card — instead of being relegated to the side in tiny type (i.e. “if you’d like to use an alternative form of payment, such as a Donor Advised Fund, call xxx-xxx-xxxx — negative connotation included.)
As a long-time supporter and contributor to Donor Advised Funds (DAFs), I wanted to stand up and cheer. Finally! It only took $110 Billion sitting in DAFs in the US for a fundraiser to take note that maybe, just maybe, the person they were soliciting might have a bunch of money in a DAF, which they could easily use to contribute to your organization. Why has it taken this long?
Fundraisers out there — don’t ignore the DAFs. These are a big deal. Are you ignoring them because you don’t know what they are? Do yourself a favor. Learn what they are. It’s not rocket science. Teach every single person in your organization what they are. Make sure your board knows, too. This is a HUGE amount of money to be ignoring.
Having said that, it’s not easy to know who the “owners” (technically, advisors) of this money are, and how much money is in those accounts. The institution now owns those funds, and they have no obligation to tell you (or anyone) who the money is being advised by. However, in addition to the suggestion above, here are some more:
You keep data on your donors, right? Ask every one of them, as a matter of course, if they have a Donor Advised Fund. That information alone gives you some important insight into that donor, which you can use to make them more comfortable relating to your organization.
Include the option to pay via a DAF in all of your solicitions asking for money. Show in your marketing materials (including digital!) that you recognize DAFs and are happy to work with them — and that you know how they work, and what their rules are (this is an important point).
Look at the checks you receive. Recently, a friend (a board member of a charity I donated to) called me to thank me for a gift, but also to inquire about that “other name” on the check — the name of the organization that my DAF was housed at. There are many choices of institutions to house your DAF, and which one the donor chooses will tell you a lot about that person.
If you know someone who has just come into a lot of money, or is about to, let them know about Donor Advised Funds. You might be surprised how many wealthy people are still writing individual checks (arcane, yes, but still…) to charities one check at a time. They are likely to be very grateful to you for introducing them to a much more efficient, streamlined and cost-effective way to make their charitable donations. That gratitude is likely to make them more attached to you and your organization, as sharing the information shows that you really care about helping that person with their giving overall (not just for your organization).
If you can afford it, open a DAF yourself, to experience first-hand how they work. In mine, I make contributions (technically, recommend them) from my iPhone when I’m sitting in front of a fundraiser. I get a confirmation immediately, which I can share with the fundraiser while we’re still having a conversation.
The minimum contribution to open an account may be less than you think.
I hope that’s helpful, and I look forward to the day when more of that DAF money is flowing through to worthwhile charities!