Donor-Advised Funds: What Every Fundraiser Should Know (and How to Bring Them Up)
There is more than $64 billion sitting in donor-advised funds right now — money that has already been given away to charity, already left the donor's bank account, already set aside for good work. It is just waiting for someone to say where it should go. Some of that money belongs to your donors. You may never see a dime of it, and not because they have forgotten you. Usually it is because nobody ever brought it up.
I sat in that seat for years. When I was raising money in ministry, the playbook was annual appeals, year-end letters, and the occasional event. Nobody handed me a guide on donor-advised funds, and I am not sure I could have told you the difference between a DAF and a private foundation if you had asked. So if this topic feels a little fuzzy, you are in good company. Here is what I have learned, and why it gets me genuinely excited for small shops: this is one of the few corners of fundraising where the money is already committed to charity, and the only missing piece is a conversation.
What a Donor-Advised Fund Actually Is
A donor-advised fund is a giving account. A donor puts money or appreciated stock into the account, takes the tax deduction that year, and the funds sit with a sponsoring organization — a community foundation or the charitable arm of a company like Fidelity or Schwab. From there, the donor recommends grants to the nonprofits they care about, on whatever timeline they choose.
The key thing to understand is that the money is already gone from the donor's side of the ledger. They have given it away. They cannot get it back. What they keep is the right to recommend where it lands. That is why a DAF grant feels different from a personal check — you are not asking the donor to part with new money, you are asking them to point money they have already set aside toward your mission.
The scale here is hard to ignore. According to the 2025 Annual DAF Report, there are now more than 3.5 million donor-advised fund accounts in the United States, holding over $327 billion in assets, and in a single year those accounts sent more than $64 billion in grants to nonprofits. That is real money moving to real organizations, and a growing share of it goes to small and mid-size groups, not just universities and hospitals.
One detail trips people up, so it is worth naming. DAFs have no required payout. A private foundation has to distribute about 5% of its assets every year; a donor-advised fund can technically sit untouched. The average payout rate runs around 25%, which is healthy, but it also means a lot of committed charitable money is parked, waiting. Some of it is parked simply because the donor has not decided where to send it yet. Your job, gently, is to help them decide.
Your Donors Already Have These (You Just Don't Know It)
Here is the part that surprised me most. The donors most likely to have a DAF are not strangers — they are people already on your list. They tend to be mid-level and major donors, business owners, professionals who had a strong income year, or recently retired folks who sold a business or a chunk of stock and set money aside for giving. If you have spent any time building your major gift relationships, some of those same people are quietly sitting on a fund.
You often cannot tell from your database. A grant from a donor-advised fund usually arrives as a check or electronic deposit from the sponsoring organization — Fidelity Charitable, Schwab Charitable, your local community foundation — rather than from the donor directly. So in your records it can look like a gift from a financial company, with the actual donor's name buried in a memo line, on a separate letter, or missing entirely. I have watched development teams send a generic thank-you to "Fidelity Charitable" and never realize a longtime supporter was behind the gift.
Why don't donors just tell you? Mostly because they assume you already know, or they are not sure a DAF gift counts as "real" giving, or they simply have not thought to mention it. Many donors do not fully understand their own fund — they set it up with a financial advisor and treat it as a black box. There is nothing sneaky going on. There is just a quiet gap between what a donor has available to give and what you know to ask for. The same way you would segment your list to treat a nine-year monthly donor differently from a first-timer, it helps to know which of your people give through a fund.
If you do uncover a donor with a DAF, it helps to be able to show them what is possible — how a gift of appreciated stock or a well-timed grant could stretch further than they expected.
Curious how you or one of your major donors could maximize their giving? Use our DAF Calculator.
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How to Bring It Up Without It Getting Weird
This is where most of us freeze. Asking about a donor-advised fund can feel like prying into someone's finances, and the last thing you want is to make a faithful supporter uncomfortable. So here is the reframe that helped me. You are only asking how someone likes to give — the same kind of question as whether they prefer giving online or by check. Framed that way, it stops feeling like prying.
The research backs up the simple act of asking. A widely cited finding from the Indiana University Lilly Family School of Philanthropy shows that nonprofits who ask their donors for DAF gifts are far more likely to receive them than those who stay quiet. Asking works, and it works precisely because most organizations never do it.
A few ways to bring it up without it feeling strange:
Add a line to your giving forms and surveys. A simple checkbox — "I give through a donor-advised fund" — invites people to tell you with no pressure at all. An annual donor survey is a natural home for it.
Mention it in your appeals. A short line near your donate button — "You can also recommend a grant through your donor-advised fund" — signals that you welcome these gifts and know how to handle them.
Ask in conversation. When you are already meeting with a donor, a warm, curious question lands fine: "Some of our supporters give through a donor-advised fund — is that something you have?" You are offering an easy on-ramp, not auditing their accounts. It fits naturally into the kind of cultivation conversation that moves a relationship forward anyway.
Make the actual giving easy, too. Put your legal name and EIN somewhere visible on your website and in your acknowledgments, because that is exactly what a donor needs to recommend a grant from their sponsor's portal. If you can add a DAF giving widget to your donate page, even better — it lets donors start the grant without leaving your site.
One rule is worth knowing so you do not stumble. Because the tax deduction already happened when the donor funded their DAF, you cannot send a tax receipt for a DAF grant, and the gift cannot pay for anything the donor receives in return — no gala tickets, no auction items, no membership perks. A warm, non-tax thank-you is the right response. Acknowledge the person who recommended the grant, not just the sponsoring organization, and steward them like the committed donor they are.
Where to Start This Week
You do not need a planned giving program or a new software platform to start capturing DAF gifts. You need a few small moves.
Check your records for mystery gifts. Pull any donations from Fidelity Charitable, Schwab Charitable, or a community foundation and try to match each one to the real donor behind the grant. Then thank that person directly.
Add your EIN and a DAF line to your website. Put your legal name and tax ID on your ways-to-give page with one sentence inviting DAF grants. This costs nothing and removes a real barrier.
Add a DAF question to your next survey or gift form. Let donors tell you how they give. You will be surprised who raises a hand.
Pick three major donors and ask. On your next round of cultivation visits, work the question in naturally with the people most likely to have a fund.
That is enough to put you ahead of most small shops, who never bring it up at all.
Donor-advised funds are one piece of a bigger picture — helping your most generous supporters give in ways that last well beyond a single year, including through vehicles like life insurance.
Interested in learning more about how a whole life insurance policy could benefit your nonprofit? Connect with a team member at Sage & Main.
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The money is already set aside. The generosity has already happened. All that is left is for someone to help these donors point it toward the work you are doing. More often than not, that someone is you, and the conversation is simpler than it feels.
C.J. Bergmen is a pastor, licensed counselor, and fundraising strategist who helps organizations and generous individuals approach giving with honesty and long-term vision.