6 Steps to Establishing a Donor-Advised Fund Strategy

If you had told Vicky Kelberer, research and strategy group manager at Vanguard Charitable, five years ago that there are donors who, on average, give $10,000 in grants, and to receive those grants, organizations do not need to fill out a single application, she would’ve said you were insane.

“I would have begged you to tell me how to connect with these donors because that would have made my job so much easier," Kelberer told attendees at NonProfit POWER's opening keynote yesterday. "And critically, it also would have enabled the organizations I was working at to really focus on our mission rather than on losing out on what we were doing,”

The 2022 event kicked off with a keynote session by Vicky Kelberer, research and strategy group manager at Vanguard Charitable.

Kelberer kicked off NonProfit PRO's event yesterday with a keynote address on donor-advised fund (DAF) strategy. This year's NonProfit POWER, which is taking place Dec. 5-7 at The Notary Hotel in Philadelphia, is an invitation-only, hosted summit for nonprofit leaders and decision-makers looking to gain insights into marketing tactics, fundraising strategies and technology solutions, as well as those eager to network and build relationships with nonprofit peers.

In her keynote, "The Power of Donor-Advised Funds: How Nonprofits Can Build Meaningful Relationships With Donors to Drive Their Philanthropic Missions Forward," Kelberer explored the impacts and opportunities giving with newer fundraising method. Here are the six key steps she suggested nonprofits should take to create a donor-advised fund strategy.

1. Update Your Information Where It’s Most Impactful

In order to connect with donors who use donor-advised funds, Kelberer suggested keeping all of your information updated and as complete as possible in charity databases like PayPal Grants Payments and Candid.

PayPal's electronic grant system allows nonprofits to receive electronic donor-advised fund payments and view all of their grants via a portal while Candid, one of the largest charity databases in the U.S., helps donors make their donor-advised fund giving decisions.

“What's really important to know about Candid is that right now their API, with the GuideStar data, forms the backend for the majority of the large donor-advised fund sponsors and increasingly a lot of the smaller ones as well," Kelberer said. "When donors come on to our portal and they search for charities, they're getting routed to a candidate profile to be able to look at that charity, initiate the grant and say this is the program I want to support.”

2. Make It Clear and Easy to Grant to Your Organization

Kelberer urges nonprofits to take a look at their own websites and marketing materials to ensure it is as clear and easy as possible to grant to their organizations. Even if you believe your website is easy to navigate, it might not be when it comes to donor-advised funds.

“When we looked at nonprofit donation pages back in 2020, only about 5% of them were mentioning anything at all about accepting gifts from donor-advised funds," Kelberer said. "You've got to be explicit. Your website has got to say, 'Yes, you accept gifts from DAFs. We're happy to do so.”

3. Educate Your Staff and Have a Data Collection Strategy

Even though Kelberer is a data lover through and through, she still keeps in mind that everything starts with people.

“Give your team the information about what donor-advised accounts are and how they work and what opportunities they present," she said. "They can start using that information as well in their own roles as they fundraise to these donors.”

Then, whoever is capturing data in your organization from your grant payments should be trained on how to get specific data that you need to most effectively communicate with donors.

4. Send Thank-Yous to the Donor, Not the DAF Sponsor

Kelberer noted that nonprofits do not need to send donor-advised fund donors any form of tax substantiation, since the DAF sponsor already did, so the only communications you have to deliver are telling these donors about your mission and thanking them. However, nonprofits often misdirect those communications.

“Send your thank you to the donor, not the DAF,” Kelberer said. “We love getting thank-yous from you all. It's amazing. But what you really want to do is make sure that you're getting your communications to the person who's engaged with your cause and represents a huge fundraising opportunity in the long term.”

5. Incorporate DAFs Into Your Complex Asset and Deferred Gift Programs

Kelberer said that more and more she’s seeing nonprofits incorporate donor-advised funds into their complex asset and deferred giving strategies.

"We have a lot of nonprofits today ... recognize even if they have a different giving or request program, they can be pretty costly to run, right?" Kelberer said. "So I definitely recommend bringing up complex assets and deferred giving as part of those fundraising conversations with your donors,” Kelberer said.

6. Cultivate Relationships With DAF Sponsors as Grantors

Even though Kelberer emphasized communicating with the donor, not the donor-advised fund sponsor, she did say that donor-advised fund sponsors do have grantmaking abilities.

“Community foundations have a specific regional focus within a particular community, and  they have direct grant-making programs where you can go to them and apply for grants in different areas," she said. "They also have really specific way with connecting donors with local organizations, so definitely connect with your local community foundations and find out how they're doing.”

NonProfit POWER attendees asked Kelberer questions during a lively Q&A session at the end of her keynote address.

Also at NonProfit POWER: Innovation to Offset Decrease in Giving

Innovation was a key theme on Monday, with the panel "The State of Nonprofit Innovation,"  addressing topics such as artificial intelligence technology, the downward trend in giving and the need to connect with donors. Brian Crimmins, CEO at Changing Our World, moderated the panel, which included Pat Duffy, co-founder of The Giving Block; Salvatore Salpietro, chief partnerships officer of Fundraise Up; and Shawn Olds, co-founder and CEO of boodleAI.

The panelists discussed the importance of big data in identifying donors and key trends, as well as how utilizing the latest innovations in technology can be crucial in proactively receiving funds. Only 49.6% of American households are giving — a drastic reduction from the 75% in 2006, Crimmins said. To bridge this gap, the panelists offered advice, such as analyzing nonprofits through a for-profit lens, creating a thorough innovation strategy, and utilizing a proper mix of AI technology with real human connection. As new technologies constantly emerge, it’s important for nonprofits to equip themselves with cutting-edge solutions to meet donors where they are.

During the final session of the day, Brian Crimmins, CEO, Changing Our World (left), moderated a panel exploring technology innovation. The panel featured (from left) Pat Duffy, co-founder at The Giving Block; Salvatore Salpietro, chief partnerships officer at Fundraise Up; and Shawn Olds, co-founder and CEO at boodleAI.

At the end of the evening, attendees were able to mingle during the welcome reception, which included a turkey-carving station, salad, a selection of pasta, a full spread of desserts and an open bar. Check out our photo gallery for a look at the welcome reception.

Networking opportunities give attendees time to connect.

Attendees were able to network over dinner and dessert.

Save the Date for NonProfit POWER 2023

Next year's NonProfit POWER will take place at the Hilton Inner Harbor in Baltimore from Dec. 4-6, 2023. Stay informed on when more details are available for the next NonProfit POWER by subscribing to NonProfit PRO's e-newsletter or checking the NonProfit POWER event site.