What are donor-advised funds?
Giving money directly to a favorite charity isn't the only way U.S. taxpayers can receive an annual deduction for their donations. They can also set up an account called a donor-advised fund (DAF).
According to the IRS, a donor-advised fund is a special fund or account controlled by a section 501(c)(3) organization called a sponsoring organization. Many people set up DAFs through community foundations. Sponsoring organizations can also be public charities—such as some university alumni associations—and investment firms that manage charitable funds. Vanguard Charitable, DAFGiving360, and Fidelity Charitable are among the big financial services companies that manage huge sums of money in DAFs.
Once an individual donor sets up a DAF account, they can contribute a certain amount of assets—it could be cash, stock shares, or some other kind of wealth—to a fund. Donors can immediately deduct the full amount from that year's taxes. They can't get the funds back; all of it must eventually go to nonprofits, but there's no time limit. Meanwhile, the funds can be invested and continue to grow. Some donors want to pick which organizations receive grants from their DAFs. Other donors prefer to let the fund managers decide.
Why do donors choose to open a DAF?
Donor-advised funds appeal to many individuals because donors can advise on how funds are invested without needing to operate a private foundation. And unlike private foundations, the IRS does not have minimum payout requirements for donor-advised funds.
Also, these funds can be relatively anonymous because, unlike foundations, they are not required to disclose as much information about their charitable giving. This means that finding detailed, public information about a donor-advised fund's grantmaking activities can be challenging for grantseekers and researchers.
Why should my nonprofit consider DAFs as a funding source?
DAF popularity is growing
Recent research shows that DAFs are the fastest-growing giving method in the United States. According to the National Philanthropic Trust, DAFs made an estimated $54.77 billion in grants to nonprofits in 2023. This growing popularity means DAFs can play a key role in helping nonprofits diversify their revenue streams.
DAFs help nonprofits of all sizes
DAFs are a promising revenue source for nonprofits of all sizes because:
- Donors give through DAFs at all levels. DAFs are not only for ultra-wealthy individuals. According to the 2025 DAF Fundraising Report, 42% of gifts to the nonprofits in the study were under $250, 28% were between $100 - $250, and 14% were under $100.
- Donors give more through their DAF than by other means. According to Candid insights 5 takeaways from the 2024 DAF Fundraising Report, "when non-DAF donors became DAF donors to the same nonprofit, their annual giving to that organization increased an average of 96%."
- DAF donors have a high retention rate. DAF portals make it easy to set up recurring gifts. According to the The 2024 National Study on Donor Advised Funds by the DAF Research Collaborative, "less than 4% of grant transactions were made anonymously,” indicating that your organization will likely be able to solicit funds from the same donors again.
How can my nonprofit find and solicit DAFs?
Most DAF managers don't offer any easy way for a nonprofit to introduce itself to DAF account holders. However, here are some ways you can attract potential DAF donors.
- Update your Candid nonprofit profile and earn Seals of Transparency so DAF managers like Vanguard can easily find you and learn about your mission.
- Participate in DAF Day, an annual community giving event in October. Nonprofits can sign up to be listed in the participant directory and receive a free marketing tool kit. Nonprofit fundraisers can also join a private LinkedIn group to collaborate on campaigns and attend educational webinars.
- Connect with local community foundations that offer DAFs to get on the radar of program officers. The Council on Foundations' Community Foundation Locator can help you find community foundations in your area.
- Make it clear on your website’s donation page that you accept donations from DAFs.
- Mention in your gift acknowledgement letters that donors can set up recurring donations through their DAF.
- Visit the DAF Direct site to learn more about the DAF direct widget.
Foundation Directory, our searchable database of grantmakers, can also help you find sponsoring organizations. Try an Organization Type search for "Donor-advised funds (grantmaker)." You can subscribe, or use it for free in person at our Candid partner locations. Eligible nonprofits with revenue or expenses under $1M can also gain a free year of access to Foundation Directory Professional through our Go for Gold promotion.
For more creative ideas and steps for using Foundation Directory to find DAF funding, check out our article, The ABCs of DAFs: How to tap into donor-advised funds.
2025 DAF Fundraising Report
K2D Strategies and Chariot
This DAF Fundraising Report provides a cross-organizational view of the impact of DAF giving on nonprofits and includes insights on common questions.
How DAF donors research nonprofits and how organizations can boost their visibility
Candid insights
Understand more about how DAF donors decide which organizations to give to and how to encourage them to give to your organization.
Donor-Advised Fund Report
National Philanthropic Trust
This annual report analyzes giving to and from donor-advised funds (DAFs).
The 2024 National Study on Donor Advised Funds
DAF Research Collaborative
This extensive report is an independent study on donor advised funds (DAFs). It includes information about DAFs from 2014 to 2022, covering aspects such as account size, age, type, succession plan, donor demographics, contributions, grants, payout rates, and grantmaking speed.
Research Charities
Fidelity Charitable
Learn how a very large DAF manager, Fidelity Charitable, researches and recommends nonprofits to its customers.
Sponsoring Organizations of Donor Advised Funds
IRS
IRS updates on DAFs, mostly for DAF managers
A widget that can be added free of charge to your nonprofit's website. The idea is to make it easier for any DAF researching your nonprofit to make a donation.