Nonprofits can greatly benefit from tapping into the resources available through donor advised funds (DAFs). These funds, managed by public charities on behalf of individual donors, allow donors to recommend grants to nonprofit organizations. If you're a donor looking to learn more about how DAFs offer a flexible, tax-efficient, and convenient way for you to manage your charitable giving, check out this blog post on "Benefits of DAFs For Donors".
Here's how nonprofits can access DAFs effectively:
Familiarize yourself with the major DAF providers, such as Fidelity Charitable, Schwab Charitable, and Vanguard Charitable, as well as community foundations and other sponsoring organizations that manage DAFs. Knowing where potential grants might come from helps you target your efforts more effectively.
Building strong, personal relationships with your donors is key. Encourage donors who might have DAFs to consider recommending grants to your organization. This can be part of your regular donor stewardship activities, including personalized communications, invitations to special events, and updates on your organization's impact.
Provide information to your supporters about the benefits of using DAFs for their charitable giving. This can include tax advantages, ease of administration, and flexibility in timing their grants. Consider including information about DAFs in your newsletters, on your website, and in discussions with major donors.
On your website, create a dedicated page or section that explains how to make a donation through a DAF. Include clear instructions and provide necessary details, such as your organization's tax ID number, contact information, and a link to a DAF Direct widget, which allows donors to make recommendations directly from your site if applicable.
Develop relationships with financial advisors and wealth managers who guide their clients on philanthropic giving. These professionals can be valuable partners in encouraging their clients to support your nonprofit through DAFs. Offer informational sessions or materials that advisors can share with their clients.
When you receive a grant from a DAF, promptly send a thank-you note to the donor who recommended the grant. Even though the grant technically comes from the sponsoring organization, recognizing the donor's role reinforces their personal connection to your organization and encourages future support.
Share stories and examples of how previous DAF grants have made a significant impact on your work. Use newsletters, annual reports, social media, and events to showcase the tangible benefits of DAF contributions. This can inspire other donors to consider using their DAFs to support your organization.
Many community foundations manage DAFs and host events for their donors. Participating in these events can provide opportunities to connect with potential donors who might recommend your organization for a grant. Offer to speak at these events or set up informational booths to increase visibility.
Ensure that your nonprofit is compliant with the rules and regulations governing DAFs. This includes acknowledging grants properly, providing the required documentation, and ensuring that the funds are used for charitable purposes as intended by the donor.
Utilize online tools and platforms designed to facilitate DAF donations. Services like DAF Direct can be integrated into your website to simplify the grant recommendation process for donors. Additionally, keeping your donor database up to date and segmented can help you target communications effectively.
By proactively engaging with donors, financial advisors, and community foundations, and by making the process of donating through DAFs as seamless as possible, nonprofits can effectively access and benefit from the growing pool of charitable funds managed within DAFs.