5 Ways Donor-Advised Funds Can Help Future-Proof Nonprofits
July 15, 2024 | 4 min read
Securing long-term funding sources for nonprofits can be a constant challenge. However, donor-advised funds (DAFs) are a powerful tool that can help support fundraising efforts for many years.
DAFs are charitable accounts that people use to set aside money to allocate to charitable causes. This giving strategy simplifies the giving process and opens a beneficial strategy for nonprofits to identify and engage these donors. The better a fundraiser understands DAFs, the better equipped they are to leverage strategies to support their nonprofit’s mission and impact.
Here are five ways donor-advised funds can help fundraisers achieve long-term goals.
- DAF donors are intentional.
Donors who use DAFs for charitable contributions are intentional givers. They choose to regularly set aside money to donate to nonprofits they care about. DAF donors often recommend ongoing donations to the same nonprofit at regular intervals, ensuring that the nonprofits they care most about receive ongoing support. Understanding how they gave and the long-term value of their contributions will help fundraisers see the ongoing impact they can have on the nonprofit’s mission. Creating and nurturing relationships with these donors will help ensure their continuing monetary support makes progress toward the nonprofit’s goals. - DAFs are growing in popularity.
Since 2009, DAFs have been increasing in popularity, and in 2022, grants from DAFs to nonprofits totaled over $52 billion. With this growing popularity, donors recognize the value of DAFs, their positive impacts on nonprofits, and the ease of granting money to organizations in need. This increase in popularity shows no signs of slowing down, so incorporating DAF fundraising strategies into a nonprofit’s plans can help ensure ongoing support. - DAFs can withstand economic shocks.
Generally, DAFs have been able to withstand economic shocks and recessions. Despite economic fluctuations, giving through this method remained consistent compared to other donation methods. In some instances, DAF giving increased, addressing specific needs that communities were facing. Although other donation methods experience periods of decline, contributions from DAFs have remained steady, providing a reliable stream of donations to nonprofits. - Grants are dispersed quickly.
DAF donations are typically delivered more quickly than government grants, especially in emergency situations or dire needs. It’s important for fundraisers to identify and foster relationships with DAF donors to help secure funding if an urgent need arises. When DAF donors who are familiar with the impact a nonprofit is making in the community learn of a dire need, they likely have money set aside for charitable purposes that they can send to the nonprofit. Understanding this group can help nonprofits address immediate needs, increase programming, deliver critical resources, and more. By leveraging the speed of DAF donations, nonprofits have a strategic advantage in remaining agile and addressing pressing needs in their communities. - Workplace-giving programs use DAFs.
Almost 27 million employees have access to workplace giving programs. These programs support employee giving and are often accompanied by an employer match. These donations are delivered to nonprofits through DAFs, such as The Blackbaud Giving Fund. To foster relationships with these donors, fundraisers must be proactive in their outreach to gain support. Using platforms including the free NPOconnect, nonprofits can reach this group of generous workplace donors. To make the most of these platforms, fundraisers must ensure their nonprofit profile is up-to-date and accurate so they are visible and searchable to this audience with a passion for giving back. Including information such as impact stories, data, statistics, and more can increase a nonprofit’s visibility, enhance credibility, and help secure ongoing donations for years to come.
When a nonprofit has a strong group of DAF donors, it has a valuable support system willing to back the nonprofit and be a reliable source of donations, especially if an emergency arises. Relationships with DAF donors can create lasting partnerships that will help ensure nonprofits can continue to serve their community and make a tangible impact on their mission.
For more information about NPOconnect or to sign up, visit https://nonprofit.yourcause.com/login/create-account.
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