Has your organization adopted any new strategies to attracts gifts from donor-advised funds (DAFs)?
Donors love these accounts. They can deposit funds (as little as $5,000) and immediately take the full charitable tax deduction. The assets then grow tax-free, and donors can make grants from them any time they wish.
There are a couple of important restrictions. DAFs can’t be used to pay off personal pledges — like capital campaign pledges. And the donor can’t receive anything of value for a gift from a DAF, like a table at a gala.
But they’re growing in number and in value — and the growth has only picked up in recent years. According to the National Philanthropic Trust, in 2016 there were more than 285,000 DAFs across the country. Those funds have assets of $85 billion, and gifts from those funds totaled nearly $16 billion.
If donor-advised funds are a bandwagon … it’s time to jump on. Here are three things you can do to attract and acknowledge gifts from DAFs:
- Register your organization with DAFDirect.org. This will allow you to download a widget for your website that will enable donors of Fidelity Charitable, Schwab Charitable, and BNY Mellon Charitable to initiate gifts to you directly from their DAF. It’s free, and they pass along 100% of the funds to the organization with no transaction fee.
Think that sounds like too much trouble? Consider this: Fidelity Charitable alone has more than 108,000 DAFs. And the average value of a DAF is $300,000.
- Tweak your remit envelope or printed reply device to invite gifts from DAFs. Alongside the “Check” and “Credit Card,” options, you can include “Recommend a gift from my DAF.” (Include fields asking for NAME and contact info for their fund, so you will know how to credit the gift and get in touch with the advisor if needed.)
- However, when you acknowledge this gift, make sure you send a letter of acknowledgement directly to the donor. Do not include the usual tax-deduction language, because the donor already received the deduction as the funds were deposited into the DAF.
Most importantly, absolutely DO cultivate a relationship with the individual behind the account!
If DAFs haven’t been on your radar screen … we hope we just changed that. There’s gold in them thar hills ….