How to Get Your Share of Donor-Advised Funds: A Fundraiser's Complete Guide
Table of Contents
Introduction: The Largest Untapped Pool in American Philanthropy
What Is a Donor-Advised Fund?
Surprising Facts About DAFs
Why Donors Establish DAFs: In Their Own Words
How to Find Donors Who Have DAFs
Twelve Ways to Secure DAF Gifts
Donor Education: The Competitive Advantage
The Policy Debate: What Nonprofit Leaders Should Know
Five Action Steps to Take This Week
Conclusion: The Relationship Is the Strategy
I. Introduction: The Largest Untapped Pool in American Philanthropy
In 2024, donors contributed $89.6 billion to donor-advised funds — more than in any previous year on record. Total assets held in DAF accounts reached $326 billion, nearly doubling since 2020. Grants from DAFs to charitable organizations totaled $64.9 billion, a 19% increase over the prior year.
That figure — $64.9 billion — is worth sitting with. It is more than half of what all private foundations in the United States gave to charity in the same year. And unlike foundations, which are governed by boards, subject to public reporting requirements, and required to distribute at least 5% of assets annually, DAFs are administered by individuals who decide — on their own timeline — which organizations will receive grants and when.
Your organization may already have donors who hold DAF accounts and have never been asked to grant from them. Research suggests that many nonprofit development officers do not know which of their donors have DAFs, have never mentioned DAFs in an appeal, and have no DAF giving checkbox on their donation forms. That is a significant, correctable gap.
This white paper covers the full picture: what DAFs are, who holds them, the surprising facts that most fundraisers do not know, what donors say about why they established them, how to find DAF holders in your donor pool, twelve concrete strategies for securing DAF gifts, the policy debate your organization should understand, and five action steps to take before this week ends.
II. What Is a Donor-Advised Fund?
A donor-advised fund is a charitable savings account administered by a sponsoring organization — typically a community foundation, a national financial institution such as Fidelity Charitable or Vanguard Charitable, or a single-issue charity. When a donor contributes to a DAF, they make an irrevocable charitable gift and receive an immediate tax deduction for the full amount, including the ability to avoid capital gains taxes on appreciated assets. The assets then grow tax-free inside the fund until the donor recommends grants to qualified charities.
The critical word is "recommends." Legally, the sponsoring organization controls the funds and makes grants at its discretion. In practice, sponsors follow donor recommendations in the overwhelming majority of cases. The donor retains advisory privileges but not legal ownership.
For the donor, the arrangement is powerful: the tax deduction comes when the money goes into the fund, not when it reaches the charity. A donor who sells a business in a high-income year can contribute a large amount to a DAF, claim the deduction immediately, and then distribute grants to organizations over the following years. Meanwhile, the assets grow tax-free — and the donor, rather than rushing to identify charitable recipients during a busy tax season, can take time to make thoughtful grant decisions.
For the nonprofit, this creates both an opportunity and a challenge. The opportunity: DAF holders are serious, organized philanthropists with dedicated charitable funds waiting to be directed. The challenge: DAF grants do not appear on standard giving records, DAF holders are not always identifiable through conventional prospect research, and the granting process is managed through the sponsoring organization rather than directly with the donor.
Understanding both sides of that equation is the foundation of an effective DAF strategy.
III. Surprising Facts About DAFs
Most fundraisers understand the basics of donor-advised funds. Fewer know what the research actually shows. Here are the facts that tend to stop development officers mid-conversation.
The numbers are staggering — and growing fast. Total DAF assets in fiscal year 2024 stood at $326.45 billion, nearly doubling since fiscal year 2020. Donors recommended $64.89 billion in grants from DAFs in 2024 — a 19% increase over the previous year. The original document you are now reading cited $110 billion in assets from a 2018 study. The number has tripled in six years.
There are 3.56 million DAF accounts in the United States. As of fiscal year 2024, there were 1,512 DAF sponsors based in the United States, including 103 national sponsors, 803 community foundations, and 606 single-issue charities, managing 3.56 million accounts. That is not a niche product for the ultra-wealthy. It is a mainstream giving vehicle used by a wide range of donors.
DAFs pay out faster than private foundations. The payout rate for DAFs in 2024 was 25.3%, up from 24% in 2023. The payout rate for private foundations in the same year was 8%. The common assumption that DAF money sits idle is not supported by the data — at least not when compared to the primary alternative.
DAFs now account for more than 10% of all charitable giving in the United States. A decade ago that figure was closer to 5%. The share continues to rise.
The average DAF gift to a nonprofit is $1,430 — significantly larger than the average online gift of $128 and the average direct mail gift of $120. DAF donors give larger individual grants than donors giving through other channels.
DAF donors make an average of six to seven grants per year. They are active, engaged philanthropists, not passive account holders. The concern that DAF money never reaches charities does not reflect the behavior of most account holders.
A DAF cannot technically be used to fulfill a pledge. This surprises many fundraisers. Because the donor has surrendered legal ownership of the funds, a DAF grant cannot satisfy a personal pledge. The correct language when working with DAF donors is "gift commitment" rather than "pledge."
Appreciated stock donated to a DAF avoids capital gains tax entirely. The donor receives a deduction for the full fair market value of the securities, not the cost basis. For donors holding long-appreciated assets, this can make a DAF gift significantly more tax-efficient than a cash gift.
Some of your current donors almost certainly have DAFs you do not know about. If a donor has a high net worth but few publicly recorded charitable gifts, there is a reasonable probability that their giving is flowing through a DAF rather than as direct gifts. Advanced prospect research can surface this inference.
IV. Why Donors Establish DAFs: In Their Own Words
Understanding the donor's motivation is the starting point for any cultivation strategy. DAF donors are not simply wealthy people looking for a tax shelter. They are, in the words of the Stanford Social Innovation Review, people whose giving is "rooted solidly in the desire for greater impact — both in terms of maximizing financial resources for giving, but also for creating a more organized and thoughtful approach to philanthropy, including selecting which nonprofits and projects to fund."
The Solomon family, who established a donor-advised fund at the American Endowment Foundation, described their motivations in terms that will resonate with any fundraiser who works with major donors:
"We had several goals in mind. First, we wanted to share our good fortune with worthwhile charitable endeavors — yet we did not have specific organizations in mind at the time. Second, we wanted to instill a sense of philanthropy in our children. With their advice, we've managed to award more than $800,000 to worthwhile causes in the past eight years. Third, we wanted to limit the amount of our estate distributed to our children to a level which would help care for their needs, but not distort their lifestyle. Fourth, we wanted to create a source of funds for them to distribute to worthwhile causes so that they could share our joy of helping others."
What that statement reveals is a donor who is not primarily motivated by tax efficiency. They are motivated by family legacy, philanthropic education, and impact. The DAF is the vehicle. The deeper motivation is the same one that drives all major giving: the desire to matter, to invest in something meaningful, and to pass those values to the next generation.
This is the conversation your organization needs to be part of. It begins not with a solicitation, but with curiosity about the donor's philanthropic goals.
V. How to Find Donors Who Have DAFs
The first challenge is identification. DAF grants come through the sponsoring organization — Fidelity Charitable, Schwab Charitable, Vanguard Charitable, a community foundation, or another sponsor — rather than directly from the donor. The donor's name may not appear on the grant at all if they choose to give anonymously. Standard donor database records may show no giving history even for donors who are actively directing substantial philanthropic resources.
Advanced prospect research is the foundation of any serious DAF strategy. Wealth screening tools can identify donors whose net worth and philanthropic capacity are significantly higher than their recorded giving history would suggest. A donor with meaningful financial assets and few publicly recorded direct gifts is a strong candidate for DAF investigation. If a colleague or peer organization has mentioned that the donor gives generously, that inference strengthens further.
After the research, the next step is conversation. Here is a practical approach: rather than asking directly, "do you have a donor-advised fund?" in an early conversation, ask more openly: "How do you prefer to make your charitable gifts — by check, through a family foundation, by donating appreciated stock?" Then listen. Many donors will mention a DAF unprompted if they have one. Those who do not can be asked more directly in a subsequent conversation once the relationship is established.
You can also ask all your donors whether they have a DAF through a simple donor survey — four or five questions sent annually. The response rate tends to be higher than most development officers expect, particularly among donors who feel a genuine connection to the organization.
VI. Twelve Ways to Secure DAF Gifts
With the identification work done, the cultivation and solicitation strategies that follow apply to all DAF donors, from those you have identified through research to those who self-identify through your outreach.
1. Ask Your Donors Directly
When you speak with a major donor by phone or in person, ask whether they have established a DAF — directly or indirectly through the giving preferences question described above. Tag DAF holders in your donor database so you can approach them with targeted outreach going forward.
2. Let Donors Know You Accept DAF Grants
Do not assume your donors know this. Many DAF holders are uncertain which organizations their sponsoring institution will approve, and some do not think to recommend a grant to a smaller or newer organization unless they are told explicitly that the organization welcomes it. State clearly, in your communications and on your website, that you accept and encourage DAF grants.
3. Add a DAF Checkbox to Your Reply Card
Include a DAF giving option on your donation forms — both print and digital. Use the language "gift commitment" rather than "pledge," since DAF funds cannot technically fulfill a pledge. Give donors an easy path to indicate their intent so you can follow up appropriately.
4. Add a DAF Widget to Your Website
A DAF widget on your donation page allows donors to look up their sponsoring institution directly from your site and initiate a grant recommendation with a few clicks. Free widgets are available and take minimal technical effort to install. The signal to your donor is important: your organization understands how DAFs work and has made it easy to give from one.
5. Feature a DAF Donor in Your Newsletter
Profile a donor who gives through a DAF — with their permission — in your newsletter or annual report. This accomplishes two things: it thanks the donor publicly (or semi-publicly), and it educates other donors about DAF giving as a recognized and appreciated option. The article can also explain how the DAF granting process works for donors who are newer to the vehicle.
6. Include DAF Language in Your Appeals
Either as part of a regular funding appeal, a stand-alone direct mail piece, or a face-to-face major gift conversation, ask donors whether they would consider making a grant from their DAF account. For donors you have tagged as DAF holders in your database, this can be a targeted appeal — separate from your general mailing — that speaks directly to their giving vehicle.
7. Promote the DAF as a Conduit for Appreciated Stock
Many donors want to give appreciated securities but give to organizations that lack the infrastructure to receive them directly. A DAF solves this. The donor transfers the appreciated stock to their DAF account — avoiding capital gains tax entirely — and the DAF sponsor liquidates the assets tax-free and issues a cash grant to your organization. If your organization cannot accept stock directly, this is worth mentioning explicitly.
8. Promote the DAF for Anonymous Giving
Some donors prefer to give without public acknowledgment — to avoid recognition, to prevent an influx of solicitations from other organizations, or for personal or philosophical reasons. A DAF allows the sponsoring organization to make the grant on an anonymous basis. For donors who want to support your work quietly, this is a meaningful option to name.
9. Promote the DAF as an In Memoriam Fund
A donor can establish a named DAF — "The Jane H. Smith Memorial Fund," for example — to honor someone who has passed away. The fund can accept contributions from multiple donors, function as the recipient of "gifts in lieu of flowers," and direct grants to organizations the deceased cared about. This use case opens a conversation with donors who are navigating loss and thinking about how to honor a life.
10. Promote the DAF as a Family Giving Vehicle
As described by the Solomon family and documented in the National Center for Family Philanthropy's research, one of the most compelling uses of a DAF is as a vehicle for teaching children about philanthropy. The family makes grant decisions together. The donor limits inheritance while creating a legacy of giving. If your relationship with a donor includes their family — particularly adult children who are developing their own philanthropic identities — this conversation is worth having.
11. Promote the DAF as a Legacy Vehicle
A donor-advised fund can be named as the sole charitable beneficiary under the donor's will. The DAF then continues to make grants to organizations the donor valued, with family members in an advisory role. This is a planned giving conversation that every major gift officer should be comfortable having — and that connects directly to the legacy motivations donors express most consistently.
12. Demonstrate Your Fiscal Responsibility
This is the recommendation that surprises most fundraisers — but it should not. Donors making significant gifts through a DAF often spread those grants over time specifically to monitor how organizations use the funds before committing more. If your organization manages money transparently, reports impact clearly, and operates with evident fiscal discipline, say so. Your financial health is part of your case for a major DAF gift. Donors with substantial philanthropic resources are sophisticated evaluators. Earn their confidence with evidence, not just mission statements.
VII. Donor Education: The Competitive Advantage
Many donors have established DAFs because their financial advisor recommended it — without fully understanding how the granting process works or how to use the fund strategically. They know the tax benefit. They may not know the range of what is possible.
This is your opportunity.
Host a gathering for your DAF donors — or for donors you have reason to believe hold DAFs — twice a year, approximately two hours per session. The format is a facilitated discussion, not a solicitation. Bring a financial advisor or philanthropic planner as a co-presenter. Cover how DAF accounts function, how grant recommendations are made, what sponsoring organizations require, how appreciated assets can be donated, and how a DAF fits into an overall estate and giving plan.
The goal is not to ask for money in that room. The goal is to position your organization as a trusted partner in the donor's philanthropic life — the organization that helps them give better, not just the one asking for their gift. That positioning is rare, and donors notice it.
VIII. The Policy Debate: What Nonprofit Leaders Should Know
The explosive growth of donor-advised funds has generated significant policy debate, and nonprofit leaders should understand both sides of it.
The reform argument. Professor Ray Madoff, who directs the Forum on Philanthropy and the Public Good at Boston College Law School and co-founded the Initiative to Accelerate Charitable Giving, has been the field's most prominent advocate for DAF reform. Her core concern: donors receive an immediate tax deduction when money goes into a DAF, but there is no requirement that the funds ever reach a working charity. Over a trillion dollars now sits in foundations and DAFs without a legal obligation to flow to the organizations doing actual work in the world.
As Madoff has argued: "Congress did not create charitable savings vehicles where the funds never have to be spent on charity. DAFs are doing an end run around the rules, and the purpose of charitable tax benefits is to get money to charities."
Her proposed reform — which has been incorporated into Senate legislation — would require DAF funds to be distributed to working charities within 15 to 20 years of the contribution, or forfeit the income tax deduction until distribution occurs.
The counterargument. Defenders of the current structure point to the data: DAFs pay out at 25.3% annually, compared to 8% for private foundations. Most DAF donors are active grant makers, averaging six to seven distributions per year. The Donor Advised Fund Research Collaborative found no evidence of widespread hoarding at the account level, even though aggregate assets are large.
What this means for your organization. Regardless of how the policy debate resolves, the practical implication is the same: the best protection against DAF money sitting unrecommended is a strong, ongoing relationship between your organization and your DAF donors. Donors who feel connected to your mission, who receive regular impact reports, and who have been personally invited to grant from their DAF accounts do not need a legal mandate to give. They give because the relationship is there.
That is ultimately what every item in this white paper points toward.
IX. Five Action Steps to Take This Week
1. Audit your donor database for DAF indicators. Pull a list of your top 50 donors by wealth screening score. For those with high net worth and low recorded giving, flag them for DAF research and follow-up conversations. Add a DAF field to your donor records if one does not exist.
2. Add DAF language to your next appeal. Before your next mailing or email goes out, add one sentence acknowledging that you accept and welcome DAF grants, along with instructions for how to initiate one. This costs nothing and captures donors who already intend to give but have not been asked.
3. Install a DAF widget on your donation page. This is a one-time technical task that removes friction for donors who are ready to give. Free options are available. Put it on your to-do list with a deadline this week.
4. Schedule a DAF cultivation conversation. Identify one donor — someone you know or suspect holds a DAF — and schedule a cultivation call or visit. The goal of the conversation is not to solicit a grant. It is to ask how they prefer to make charitable gifts and to understand their philanthropic priorities. Let the giving vehicle come up naturally.
5. Plan a DAF donor education session. Identify a date in the next 90 days for a gathering of your major donors — framed as a philanthropic planning discussion rather than a fundraising event. Engage a financial advisor or philanthropic planner as a co-presenter. Send personal invitations to your ten highest-capacity donors.
X. Conclusion: The Relationship Is the Strategy
Donor-advised funds hold more money than at any point in history. The number of accounts is growing. The average grant size is growing. The payout rate — 25.3% in 2024 — means that a meaningful share of those assets is flowing to charities every year.
The question is not whether DAF money reaches nonprofits. The question is which nonprofits it reaches — and why.
It reaches the organizations whose leaders understand the vehicle. It reaches the organizations that make it easy to give. It reaches the organizations that cultivate their DAF donors as the serious philanthropists they are, rather than treating them like mail-merge recipients.
Most importantly, it reaches the organizations that have built real relationships with their donors — relationships deep enough that when the donor sits down to recommend grants from their account, your organization comes to mind because the connection is alive.
The dozen strategies in this white paper are practical and worth implementing. But they are tactics in service of a strategy that is older and simpler than any of them: know your donors, care about their philanthropic goals, show them what their support accomplishes, and ask.
The DAF is the vehicle. The relationship is the strategy.
A Note on Use
This white paper is offered freely for educational purposes. Please share it with colleagues and development staff who may find it useful — provided the author's byline remains intact: By Laurence A. Pagnoni, MPA. Reproduction in publications, training programs, or institutional materials requires attribution.
What has your experience been cultivating DAF donors — what approaches have worked, and what has surprised you? Share your thoughts in the comments section of the website.
