How to tap into donor-advised funds 

In the previous blog of this two-part series, we introduced our jillionaire friend, Bob, and his love of animals in his hometown to help illustrate what DAFs are all about. We also explored how he arrived at the decision to give his money to nonprofits that support his favorite animals in perpetuity through his own donor-advised fund. 

Well, this is all well and good for Bob. But Bob’s not alone. In fact, DAFs are an increasingly popular option for individual donors to formalize their giving, and in 2021, the charitable assets for all DAFs totaled a whopping $234.06 billion.  
Considering the dollars at play, let’s now shift our focus to the important considerations for nonprofit fundraisers who may want to get in on some DAF funding action.  

3 creative ideas to help you connect with a DAF 

So let’s say you run the Animal Welfare Organization in Bob’s hometown.  How do you tap into the money from Bob’s DAF?   

It would be lovely if you could just call up Bob and ask him to consider funding your nonprofit through his donor-advised fund. But DAFs are usually started because individuals like Bob want to stay anonymous and avoid being bothered by solicitations (i.e., you).  This means that Bob is probably hard to find.   
Similarly, a lot of DAF managers (like Fidelity and Vanguard, two of the biggies) are not set up for you to send a proposal to request funding. They want to find you (on behalf of Bob), and there isn’t usually a grant application process you can use to get in front of them.   

So, what can you do to tap into DAF funding? It’s tricky, but there are ways to get in front of Bob and/or Bob’s DAF managers. Here are a few creative ideas for how to do so: 

  1. Many DAF managers (including the ones listed above) use Candid profiles to evaluate nonprofits in order to recommend their individual donors fund them. They’ll search Candid’s nonprofit profiles using search tools to help them identify and compare nonprofits based on their geography (e.g., Bob’s hometown), program focus areas (e.g., Animal Welfare), and mission-driven outcomes.   
    Brief Commercial: Studies show that nonprofits with Candid Seals of Transparency get more donations, including repeat donations.  Find out how to easily update your Candid nonprofit profile and earn your seal.   
  1. Look for Bob (and other DAF holders) in your mailing list. When looking to connect with DAF holders, start with people whose contact information you already have. Since you don’t know who on your list has a DAF of their own, consider making a broad appeal for their support. To help encourage DAF holders to support your organization, you can put a sentence like the following in your general donation request letters, in your nonprofit’s email newsletter, or on your website:   
    “Please keep in mind that [my nonprofit] accepts gifts from donor-advised funds (DAFs), so if you have a DAF, please consider recommending to your financial advisor that they support [my nonprofit].” 
  1. Search for Bob and his DAF among your current donors.  Another way to try to identify individuals in your donor base with a DAF is to ask them directly. For example, consider adding a place on your marketing or solicitation materials for a donor to indicate whether they are giving through a DAF. That way, you can link the resulting named individuals with their “anonymous” DAF.  
    Also, if you do receive funding from DAFs, there may be times when you will receive a check “from Fidelity,” for example, that notes which individual fund the donation comes from. In this scenario, be sure to check the name of the fund against your donor database. (Here’s more from Fidelity on how it works for them.) Like the previous idea, this approach makes it easier to know who to thank directly, and it gives you a way to build a stronger, more personal relationship with your DAF donors. 

How to find DAF funding using Candid’s Foundation Directory 

It would be nice if every donor-advised fund had a name that’s easy to remember, like “Bob’s DAF.”  But usually, DAFs are represented by large investment companies, community foundations, or any one of the hundreds of other charitable giving platforms. And as we’ve mentioned, you can’t approach DAFs like a private foundation, because they generally don’t encourage you to apply to them directly. This can make them harder (but not impossible!) to track down.  
However, if you want to know what kind of presence DAFs have in your community, you can use Candid’s Foundation Directory (available via subscription or for free at one our many FIN partners) to search for DAFs and their charitable giving in your town. 

For example, let’s say your animal welfare organization is in Pittsburgh (which also happens to be Bob’s hometown), and you want to know what DAFs are giving to organizations like yours.   

To get a picture of this giving, simply log into Foundation Directory and perform this advanced search. 

Screenshot of Foundation Directory's search page, with the DAF option highlighted

Note that the “Subject Area” and “Geographic Focus” fields are populated similarly to any other Foundation Directory search. The main difference: we’ve added the “Donor-advised funds (grantmaker)” value to “Organization Type” field. That way, the results will only include grantmakers that are DAFs giving to animal welfare organizations in Pittsburgh.   
Now that we’ve run our search, let’s check out the results.   

Screenshot of Foundation Directory search results

The results tell us that there have been at least seven DAF-managed organizations that have granted funding to animal welfare nonprofits in the Pittsburgh area, including 68 grants from DAFs at Fidelity totaling more than a million dollars.   

Let’s take our search a step further. Looking closer at a selection of the Fidelity grants, you can see which specific organizations these DAF grants have gone to. 

Screenshot of Foundation Directory search results

Some key learnings you can take away from this snapshot — in order of importance — include: 

  1. There are a number of DAFs managed by Fidelity, which gave small grants to animal welfare nonprofits in Pittsburgh. 
  1. It is probably a good idea to contact your donors and prospects and see if they have a DAF managed by Fidelity. That way, you can request to be recommended as a potential grantee. 
  1. Each of the nonprofits that have received grants through Fidelity may be able to tell you more about the individual DAFs that funded them.  (Then again, they might choose not to disclose this information—however, it’s worth an email or phone call to find out. Nothing ventured, nothing gained, right?).  
  1. Most of the animal welfare nonprofits that received grants have earned a Candid Seal of Transparency (that’s what the “Gold” and “Platinum” boxes next to their names mean). So, if you’re looking to get in on the action, it might very well be worth updating your Candid Profile too! 

Armed with some creative approaches and the tools described above, you can overcome some of the common challenges of getting on these donors’ radar and tapping into DAF funding to support your nonprofit’s mission-driven work.   

Happy fundraising!  Bob wishes you well!