Seven Ways to Fundraise from a Donor-Advised Fund

This week I spent half an hour with about 125 fundraisers, on a session hosted by Raisin, talking about donor-advised funds. The questions submitted beforehand were not really about what a DAF is. They were about what to do about them.

So here is the practical half of that session, written down.

Start with what the money actually is

There is $17.3B sitting in 74,528 fund accounts across 205 Canadian sponsors. Every dollar of it has been donated, receipted and claimed. It is no longer the donor's money. Last year $3.33B went in and $2.00B came out, so the pool is growing faster than it empties. All of that comes from CRA T3010 filings, and we publish it free at wellfunded.io/daf-data.

The number matters less than the structure behind it. A DAF is not a new way to pay. It is a new structure, and treating it like a cheque with a different logo is how a charity ends up mishandling the gift and losing touch with the donor.

There are two transactions, and they can be years apart. On one side, a donor contributes assets and receives a receipt. That is the donation, and it usually happens because of a business sale, a block of appreciated securities, an inheritance or a tax year that needs solving. None of those moments are a response to your ask. On the other side, grants flow out to charities. That is not a donation, it is a grant, and the philanthropic decision behind it was made in a room you were not in.

Everything below is a version of the same job: be known, and be reachable, before that conversation happens.

1. Mine your database for advisors

Some of the people who influence a DAF gift are already in your CRM, and many shops have never called them about it.

Wealth managers, accountants and estate lawyers give to you. They come to your events. Some of them sit on your board. They are also in the room when a client sets up or funds a DAF, and when that client asks who is doing good work locally.

You have them coded as donors. They are also a referral source, and nothing stops them being both.

Run the search this week. Job titles, firm names in the employer field, board and committee lists. Then do something with the list: a coffee, a site tour, a short briefing they can hold in their head the next time a client raises philanthropy.

2. Say "donor-advised funds" on your website, and put a human beside it

If your ways-to-give page doesn't say donor-advised funds, some donors conclude you don't accept them and move on. That sounds unlikely right up until you meet a donor who has said it out loud.

Then the harder version. We're working through roughly 600 charities at the moment, and at a lot of them, reaching an actual person takes more effort than it should.

A contact form is not contact information. An info@ address nobody monitors is not contact information. If an advisor or a DAF administrator is trying to verify something on a Thursday afternoon, they need a phone number and a name.

Of everything on this list, this one costs the least.

3. Learn the handful of sponsors that intersect with your work

Nobody needs to know all 205. You need to know the few whose donors overlap with your cause and your region.

The money is concentrated. 66% of all Canadian DAF assets sit with ten sponsors. By province it's $7.89B in Ontario, $3.63B in Quebec and $2.88B in British Columbia. 64 community foundations hold $7.06B between them, and six bank-affiliated sponsors hold $4.52B. If you work in one city, your community foundation is likely to matter more to you than a national platform. If you work internationally, the field narrows, and it's worth knowing which sponsors are set up to grant outside Canada.

One distinction is worth getting right, because it trips people up. A community foundation often has two pockets. There's the money it grants at its own discretion, through community funds and field-of-interest funds, which is a conventional granting relationship with deadlines, criteria and an application. Then there are the donor-advised funds it administers for individual families, where the family recommends where the money goes. Same organization, two different processes. Some sponsors outside the community foundation world run charity-facing programs as well.

Apply to the first. For the second, the seven items in this post are the work.

Pick five sponsors. Learn who works there. Introduce yourself, and ask which of the two you're talking about, because many of them do both.

4. Ask everyone, on every form and in every conversation

"Do you give through a donor-advised fund?" belongs on your giving form, your event registration, your legacy conversation and your major gift discovery.

It's worth saying plainly that these are not only ultra-wealthy donors. Online-native platforms hold 31% of all DAF accounts in Canada and 4.9% of the money, with an average fund of about $37K. Plenty of DAF donors already look like the donors in your database.

5. Give donors a way to self-identify, and code it in your CRM

Because the grant legally comes from the sponsor, a DAF donor can be invisible to you unless they tell you directly or the sponsor passes the details along. How often that happens varies a great deal. In a session we ran with 60 Canadian charities, 14% said they had received a donor email address and 14% a mailing address. Sponsors are working inside what the donor authorized and what their own systems can produce, so the answer differs from one to the next.

Which is why the path you control is worth building. A checkbox on the form, a field in the database, a code you can segment on. Once it's there you can steward a person rather than a fund name.

6. Acknowledge every grant, addressed to the donor, routed through the sponsor

You don't receipt it. The receipt was issued on the other side of that line, possibly years ago.

What you do is thank the person. Half the charities in that session had received a fund name, which is often enough to write something specific rather than generic, and many sponsors will forward an acknowledgement to the donor if you ask. So write to the donor, send it through the sponsor, and ask what the sponsor's process is rather than assuming there isn't one.

7. Be visible to the intermediaries, not only the donor

The chain today runs donor, advisor, sponsor, charity, beneficiary. That can feel like a lot of layers, until you remember that charities are intermediaries too. Every one of us stands between a donor and the person who benefits, and it rarely troubles anyone. A new layer further upstream is the same kind of layer, seen from the other side.

Being visible to that chain is ordinary, unexciting work. An annual report a sponsor's staff can find without emailing you for it. Impact data that answers the obvious questions. A profile that makes it straightforward for someone to check you out before they raise your name.

Three things worth stopping

Don't receipt a DAF grant. It's a common processing mistake. The donation was receipted when the money went into the fund, so a second receipt against the same dollars is a CRA problem you don't want.

Don't ask a sponsor to steer advised money your way. Their own grant programs are a different matter and you should apply to those. What doesn't work is asking staff to point a fund holder's dollars at you, because that recommendation belongs to the donor, and putting someone in the middle of it usually costs you the relationship.

Don't build your DAF ask around December. The tax pressure that drives year-end giving sits on the contribution side, when money goes into a fund. By the time a donor is deciding where grants should go, the calendar matters less, and granting plans tend to get set earlier in the year. If your only DAF touchpoint is a year-end appeal, you're likely arriving after the decision.

A note on restrictions

18% of the charities in that session had received any instruction on how a DAF gift should be used. If that holds more broadly, a good share of this money arrives unrestricted, which would make it among the more flexible funding in the sector. It comes from 60 charities rather than a national study, so treat it as a working assumption rather than a finding, and check it against your own files.

What's still hard, and why

Receiving a DAF gift isn't a consistent experience. When we asked 60 charities to describe it in one word, the most common answer was "inconsistent." That's the fairest summary I can offer, and it came from them rather than from us.

Nobody in this chain is failing on purpose. 205 sponsors have 205 processes, built at different times, for different reasons, on different systems, and 85,000 charities sit downstream of all of them. Sponsors are working within constraints they didn't design either. We wrote up what charities told us in Missed Connections, which is worth passing to whoever handles your gift processing.

We're working with several Canadian sponsors on shared standards for data sharing, disbursement and stewardship. That work is underway.

In the meantime, the seven items above are within your control, most of them cost nothing but attention, and the first three are worth doing this week.

Where to start

If you do nothing else: search your database for advisors, put donor-advised funds on your website with a phone number beside it, and spend ten minutes on the DAF data working out which sponsors are near you.

Then claim your free charity profile. It takes about ten minutes, it's free for charities, and it's how funders find you when they go looking.