Soapbox Engage Blog

If you’ve worked in nonprofit fundraising for any amount of time, you’ve likely heard the term Donor Advised Fund (or DAF). But what exactly is a DAF—and how can your organization tap into this growing source of philanthropic dollars?

In this post, we’ll break down what DAFs are, how they work, and what nonprofits can do to attract and steward these kinds of gifts.

Table of Contents

1. What is a Donor Advised Fund (DAF)?
2. Why Should Nonprofits Care About DAFs?
3. How Do DAFs Work—From a Nonprofit’s Perspective?
4. How to Make Your Nonprofit More DAF-Friendly

What is a Donor Advised Fund (DAF)?

A Donor Advised Fund is a charitable giving account held at a sponsoring organization—typically a community foundation, financial institution, or a nonprofit that manages funds on behalf of donors. Donors contribute to the fund, receive an immediate tax deduction, and then recommend grants to charities over time.

Think of it like a charitable savings account: donors deposit money, let it grow tax-free, and then distribute grants at their own pace.

Quick Facts About DAFs:

• Contributions to DAFs are tax-deductible at the time of donation.
• Donors retain advisory privileges but do not directly control the funds after donating.
• DAFs are managed by institutions like Fidelity Charitable, Schwab Charitable, Vanguard Charitable, and community foundations.

Image sourced from givechariot.com. Check out their DAF 101.

Why Should Nonprofits Care About DAFs?

DAFs are one of the fastest-growing vehicles for charitable giving. According to the National Philanthropic Trust, DAFs granted out over $52 billion to qualified charities in 2023 alone.

Here's why nonprofits should take notice:

• Higher average gift size: DAF grants tend to be larger than typical individual donations.
• Repeat giving potential: DAF donors often give annually or multiple times a year.
• Loyalty & impact: Many DAF holders are intentional and values-driven, aligning well with mission-based organizations.
• Fast growth: DAFs are the fastest-growing vehicle in philanthropy. According to Chariot’s 2024 DAF Fundraising Report, DAF revenue is growing 214x faster than non-DAF Revenue in the sample group.

How Do DAFs Work—From a Nonprofit’s Perspective?

When a donor recommends a grant from their DAF, your nonprofit receives the grant just like any other donation, typically as a check or electronic transfer from the sponsoring organization. However, there are a few key things to know:

• The check will likely come from the sponsoring organization, not the donor.
• You may not receive the donor’s contact info unless they opt to share it.
• Don’t assume a lack of contact info means a lack of engagement—the donor is still interested in your mission!

How to Make Your Nonprofit More DAF-Friendly

Here are a few simple steps your nonprofit can take to make it easier for donors to give through DAFs:

1. Incorporate a DAFpay in your donation forms

Include a DAF option on your website’s donation page. Many donors have DAFs but don’t always realize they can recommend a grant to your nonprofit. Soapbox Engage donation pages integrate with Chariot’s DAFpay, making it easy for donors to give from their Fidelity, Schwab, or BNY Mellon accounts directly from your donation page.

2. Acknowledge the gift thoughtfully

Even if you don’t have personal info, you can still thank the sponsoring organization—and include language encouraging the donor to identify themselves so you can thank them directly.

3. Build relationships with local foundations

Many community foundations manage DAFs. Reach out and build connections—they may recommend your organization to their DAF clients.

4. Track DAF gifts in your CRM

If you're using a CRM like Salesforce, make sure you’re tagging and tracking DAF gifts so you can identify patterns and follow up effectively.

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DAFs aren’t going away—in fact, they’re becoming a more significant part of the philanthropic landscape. By understanding how they work and making small adjustments to your outreach and giving tools, your nonprofit can position itself to receive more of these impactful gifts.

And if you’re a Soapbox Engage user, adding DAF options to your online giving strategy is just a few clicks away.

Need help making your donation page more DAF-friendly? Contact our team or check out the Soapbox Engage Donations app to get started.