Practical Tips for Engaging & Stewarding DAF Donors
July 29, 2025 - One of the greatest changes to the philanthropic landscape in the last decade has been the rise of donor-advised funds (DAFs), a charitable giving tool. According to National Philanthropic Trust, in 2023 there were nearly 1.8 million DAFs, while just seven years prior in 2016, there were less than 300,000. Due to its flexibility, tax benefits and low minimums, the DAF has grown significantly in popularity among donors. In 2023, DAF assets totaled $251 billion, and donors granted almost $55 billion from their DAFs to charity in that year alone.
Nonprofits, are you maximizing the fundraising opportunity presented by donor-advised funds? In this article, we’ll share best practices for receiving DAF grants and engaging with DAF donors.
Before we begin, let’s briefly review how a DAF works:
A DAF is a charitable giving account that is sponsored by a public charity, like HighGround Advisors, and funded by a donor’s tax-deductible contributions of cash or noncash assets. Contributions to a DAF are usually invested and have the potential to grow, tax-free, over time. Donors retain the right to recommend grants from the DAF to eligible charities of their choice. Meanwhile, the sponsoring organization handles the tax receipting of donor contributions as well as grant processing and due diligence. DAFs can simplify the giving process for donors and provide tax benefits that can help them multiply their charitable impact. This PDF highlights some of those benefits.
KNOW THE BASICS
It’s important to understand the basics of how DAFs work so that you can meaningfully engage with donors who have one or may benefit from one. DAFS are a valuable tool in the fundraising toolkit that might help your donors meet their charitable goals in a maximized way.
Equally important is understanding IRS regulations concerning grants made from DAFs. For example, if you encourage a donor to use their DAF to pay for their tickets to your organization’s upcoming gala, they may be disappointed to later learn that this is an impermissible grant purpose. We have previously answered some of the most frequently asked questions regarding IRS DAF regulations here.
MAKE IT EASY
One of the simplest things you can do is make sure a donor has no trouble getting a DAF grant to your organization.
- Make important giving information easy to find on your website and materials. When a donor submits a grant recommendation to their DAF’s sponsoring organization, they must provide key pieces of information about the charitable grant recipient, including the organization’s EIN and sometimes also the address and contact information.
- Ensure your organization’s information is up to date and listed in applicable databases. Many sponsoring organizations rely on databases like GuideStar and Charity Navigator as they conduct their due diligence on grant recipients.
- When a sponsoring organization reaches out to facilitate the grant delivery, be responsive in getting them the information they need. They may send a grant by mailed check, ACH or wire.
RECEIVE & RESPOND INTENTIONALLY
While donors can choose to give from their DAFs anonymously, the vast majority do not. So, when a sponsoring organization sends you a DAF grant, the donor’s name and contact information are typically included in the letter that accompanies the grant. The letter may also indicate if the donor requested that the grant be used for any particular project or purpose. This is your opportunity to establish or strengthen your relationship with the donor.
- Make sure gift entry staff are familiar with how to process DAF grants. They should mark the DAF sponsor and/or DAF name with a “hard credit” but also capture the donor who recommended the grant by marking them with a “soft credit.” It is the donor you want to thank, not the sponsoring organization. Again, this information is typically in the letter that accompanies the grant.
- Remember that DAF donors are eligible for a charitable tax deduction when they contribute money to their DAF, NOT when they make grants from their DAF. Since they already received a tax receipt from their DAF sponsor at the time of contribution, you should not send the donor a tax receipt for the grant to your organization. Instead, focus on your relationship with them by sending an impactful thank you letter.
- Flag DAF donors in your donor system or create a running list of all donors who have given with a DAF. This will allow you to engage with DAF donors in a more targeted way in the future.
ASK FOR DAF GRANTS
A 2020 study conducted by the Lilly Family School of Philanthropy found that 42% of nonprofits that did not solicit for DAF grants still received DAF grants over a three-year period. But in that same period, among those that DID solicit for DAF grants, that number jumped to 87%. Sometimes all you have to do is ask.
- In your fundraising materials and in conversations, suggest donors make a DAF grant.
- List a grant from a DAF as a giving option on your website.
- Feature stories about donors who gave with their DAFs and the impact they made.
- In your communications, encourage DAF donors to set up recurring DAF grants to your organization.
- In challenging times, target your appeal to DAF donors. DAF donors are poised to meet the needs of charities in times of recession or market disturbance because the money has already been given. Rather than ask a donor to give from their bank account when money is tight, you can simply ask a DAF donor to grant the charitable dollars already in their DAF to your organization.
- Host charitable giving seminars for your donors to teach them about the benefits of a donor-advised fund. HighGround is frequently brought in to speak to donor societies about DAFs as well as charitable tax strategies, other giving tools, and estate planning.
CULTIVATE DAF DONORS
A DAF can often indicate that a donor has philanthropic intent and capacity. If a donor has a DAF, they are serious enough about giving to have opened and contributed to the fund. And if a donor has given to your organization through a DAF, they are likely capable of giving again in the future, as the average DAF size is about $140,000. DAF donors tend to be strategic about the long-term impact of their giving, so cultivate them as you would major gift donors and engage with them in meaningful ways to share your vision and instill confidence in your organization.
- Invite DAF donors to events and show them the good work you are doing.
- Tell DAF donors the impact of their particular DAF grants.
- Be transparent and demonstrate missional effectiveness.
- Provide opportunities for collaboration and feedback sessions.
- DAF donors have a higher rate of volunteerism in both direct work and committee service, so provide opportunities for them to roll up their sleeves and be on the front lines of the work you are doing.
- Include DAF donors in your appeals for larger gifts and share the outcomes of other significant gifts your organization has received.
- Because DAF donors are often savvy and strategic, they are likely ready for more complex planned giving conversations.
REACH THE GENERATIONS
DAF donors are often strategic about planning for the future and weaving philanthropy into the fabric of their family. Many donors incorporate their DAFs in their estate planning, and because they are able to name others to join them in managing their DAFs, some DAFs function as mini family foundations, involving generations of donors. You can be a valued resource to DAF donors by partnering in these efforts.
- Ask DAF donors to name your organization as a beneficiary in their DAF’s succession plan.
- Host family-friendly service projects and events.
- Teach donors how to talk to their children about stewardship and generosity.
- Help DAF donors introduce their children to the joy of giving and serving.
- Install a junior board of young adults to develop new leaders and advocates.
PARTNER WITH A DAF SPONSOR
There are more than 1,000 DAF sponsoring organizations nationwide. As you work with your donors, you may discover that a DAF will help maximize their giving. Who will you trust to partner with you in stewarding that donor relationship? Consider these things:
- Does the sponsoring organization align with your values and the values of your donor?
- Does the sponsoring organization have expertise in receiving complex, noncash assets, like minerals, real estate, closely-held business interests and valuable personal property?
- Does the sponsoring organization provide excellent, responsive service to your donor and to your organization?
- Does the sponsoring organization care for your donor as an extension of your relationship, facilitating and encouraging the giving process?
As a DAF sponsor, HighGround is privileged to work with generous donors in support of nonprofits like yours.
If you would like more information about DAFs, charitable giving seminars or partnering with HighGround for your donors’ giving needs, contact Katie Hancock, Director of Philanthropic Engagement & Strategy, at 214.978.3303 or katie.hancock@highgroundadvisors.org.