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Donor-advised funds. The silver lining awaiting nonprofits.

This is a continuation of my last post, Don’t Stop Fundraising! Donor behavior in a recession and in COVID doesn’t look like you think.

In my previous post, I provided data on donor’s anticipations for their 2020 giving as well as historical data on giving through various economic conditions. I ended with a segue into this post, another data-driven reason for nonprofits to remain optimistic in today’s climate (that didn’t exist or was not nearly as significant in previous recessions) and that is…donor-advised funds (DAFs).

According to the 2019 National Philanthropic Trust report, there’s $121 billion dollars invested in DAFs. In other words, there’s $121 billion already allocated for charitable purposes, they just haven’t been allocated to deserving organizations yet.

Fidelity Charitable has recently announced that since they began tracking last month, more than $100 million in grants have already gone to 4,500 nonprofits in response to COVID-19. Fidelity Charitable announced that in March 2020 alone, total grant volumes increased 36% from the previous year’s total.

Fidelity Charitable also announced a $200 million challenge ($100 million more than already committed) to its donors leading up to #GivingTuesdayNow on May 5, 2020.

My takeaway, if you know donors are giving to your organizations from DAFs, they should be one of your first asks. Remember, you’re not asking for them to give up any resources as those resources have already been allocated – rather, you’re asking your donors to direct previously given resources to your mission.

I’ve seen a few organizations incorporate apps on their website such as DAFWidget to make it easy for donors to give directly from their DAF to your organization. I don’t have any data on the effectiveness of such apps, but I’ve seen organizations use them so I thought I’d add this as an additional resource for your organization to consider.

*Stein Strategies Tip: DAFs have succession plans and many donors have not put into place, or are not aware of, succession plans for their DAFs – which leaves any remaining funds to go to the plan provider’s own philanthropic fund. Consider asking for not only for a gift today, but asking that your organization to also be named a recommended legacy grant recipient for the remainder. This provides value to your donors by informing them of DAFs’ succession planning and can increase the gift!

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