Guest Post by Michele Borucki, Helen Brown Group
A Donor Advised Fund (DAF) is a charitable giving vehicle administered by a public charity created to manage donations on behalf of organizations, families, or individuals. Donor advised funds are not new in the philanthropic realm, but they are certainly on the rise. According to the 2019 Fidelity Charitable Giving Report, donations made from Fidelity donor advised funds in 2018 totaled $5.2 billion, a 17% increase from 2017. Fidelity also stated that 60% of these donations were unrestricted. This a big deal and very good news for organizations seeking support.
The attraction to using commercial funds or community foundations for a donor advised funds is the ease of access for the donor. Apps and account access through the organization’s website allows the donor to make immediate contributions or to see the activity in their fund whenever they want.
One of the primary benefits of using a donor advised funds is that a donor doesn’t necessarily have to contribute liquid assets to their funds. The National Philanthropic Trust 2018 Donor Advised Fund Report stated that approximately 60% of contributions were non-cash assets including securities, business interests, real estate, fine art, and jewelry. Using illiquid assets for charitable grants is on the rise, and we will definitely see a significant increase in the next few years as donors see how easy it is for donor advised funds to turn these assets into grants that will make an impact for the organizations and causes they are passionate about. Some donors have already caught on and use their contributions for impact investments to double the influence of their philanthropy.
The donor advised fund donor is a savvy philanthropist. They understand the importance of financial planning and know how to maximize their philanthropic experience to benefit their personal financial well-being as well as that of the organizations they choose to support.
A few other characteristics of a donor advised fund donor:
Introducing yourself and cultivating a donor advised fund donor isn’t always possible, as sponsor organizations don’t offer an easy way to access their customers. The best way to let these organizations know you accept these types of donations is by advertising on your website and making it clear on gift acknowledgement letters. Also, getting to know the administrators of local sponsor organizations and community foundations can be beneficial; after all, they are the people with access and who can recommend your organization to their customers. Make it a priority to engage these donors by providing access to volunteer opportunities, major gift mailings, and events.
The rise in donors choosing donor advised fund as their giving vehicle shows us that this method of grant-making is here to stay. It’s important to not let these donors go unnoticed, or your organization will have missed out on tapping a valuable resource.
About the author: Michele began her career in development in 2012 as a Development Analyst with UC Berkeley Corporate and Foundation Relations. Before joining HBG, she served as a Prospect Analyst with UC Davis and a Senior Prospect Analyst at the George Washington University. Michele is a member of NEDRA and Apra International, and was the Social Media Chair for Apra Metro DC. She received her B.A. in creative writing from Florida State University, studied higher education leadership from CSU Sacramento, and currently resides in Tampa, FL with her husband and two children. Michele joined The Helen Brown Group in July 2018.