How Nonprofits Can Succeed with Donor-Advised Funds

A rising trend in 2018, donor-advised funds (DAFs) have grabbed ahold of the charitable donation threshold, impacting over 25 percent of the funds donated to the top 400 organizations, with early 2017 reports showing the trend to be continuing. But what exactly is a donor-advised fund and why should your nonprofit care about it? This blog will further divulge into the world of DAFs and their significance in the nonprofit sector, after their brief introduction last week.

Donor-advised funds can be just the thing that your organization is looking for. It’s a quick way to secure a large amount of funds for your nonprofit. Think of it as a personal charitable savings account: a donor creates an account and makes a contribution of cash, stock or other assets like real estate or artwork that they can make an immediate tax deduction on. Here’s how nonprofits can succeed with DAFs, courtesy of Grants Plus.

Recognize the Successful DAFs You Already Secured

Even if you think that you don’t have any donors giving to your organization through DAFs, it might be time to think again. Checks don’t come directly from donors; rather, they come from a sponsoring organization. For example, this could include a financial firm (Fidelity, Charles Schwab) or a community foundation (The Cleveland Foundation, Greater Cincinnati Foundation). Make sure your gifting team knows how to properly spot these donations so a proper thank you can be put into place. Once a DAF donation is received, you’re going to want to start keeping track of the donations make from the same entity.

Make it Simple for Donors to Donate Through DAFs

Since most funds are donated through the internet, having a direct DAF widget might prove helpful for your website. For example, The Centers for Families and Children has DAF Direct, which allows donors to log into their financial accounts (Charles Schwab, Fidelity) and make grants to an organization. If you don’t want to do that, try to streamline the donation process for your donors. Make it easy for them to give to your organization by making your organization accessible: an address, legal name and federal tax ID number so checks can be mailed. Other things you can do is make your website donor-friendly by including blog posts and marketing materials encouraging those to give.

Delve Into Donor-Advised Fund Networks

While there’s no database you can tap into, there’s networks of people within this industry that assist with DAF issues, including wealth, tax and legal advisors, as well as the fundraising and donor services staff at community foundations. By nurturing relationships with donor services staff at your local community foundation, you can get better acquainted with a foundation you’re seeking donations from. 

No matter how your nonprofit chooses to run its operations, it’s always important that you have a Glen Rock Small Business insurance program that is custom-tailored to cover the unique exposures of the nonprofit sector.

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