DAFs Take Front and Center for Nonprofit Fundraising in 2023
In an economy in which consumers pull back on spending as their balance sheets become increasingly stressed – an event that often correlates with less charitable giving activity – adept fundraisers are increasingly mobilizing their efforts around stewarding grants from Donor-Advised Funds (DAFs), which currently hold more than $200 billion in assets that have already been donated and must eventually be disbursed to working charities.
After conducting a survey of nonprofit fundraising professionals, FreeWill, a social-good enterprise at the nexus of philanthropy and estate planning that partners with nonprofits to help raise transformational gifts, found that virtually all respondents view DAFs as a force multiplier for their fundraising strategies in 2023. Specifically of note among FreeWill’s findings:
DAFs represent growing focus with proven ROI for fundraisers, particularly given current economic headwinds
- 100% of respondents believe DAFs will be of greater than or equal importance in 2023, relative to 2022 (72% said more important, 28% said equal)
- 54% of respondents think soliciting DAFs will be more important during an economic downturn, and zero think they will be less important
- Surveyed organizations that received four or more DAF gifts in 2021 indicated they received 32% more DAF gifts in 2022 and 56% more DAF dollars, with the average gift size increasing 24%
- Those that actively promoted DAFs to their donor bases received 2.2x more dollars from DAF grants than those that did not
Despite increased focus ahead for DAFs, most fundraisers still struggle to promote them
- 54% of respondents still don’t promote DAFs to their donor bases
- Smaller organizations (less than $100,000 in yearly donations) are the least likely to solicit DAFs
- 42% say discovering which of their donors have DAFs is their biggest hurdle, with 25% struggling with anonymous donations
Positive fundraiser perceptions and favorability around DAFs
- 84% of respondents had a favorable opinion of both National DAFs and Community Foundations
- 91% of respondents view National DAFs somewhat (41%) or very (50%) favorably
- Favorability for National DAFs (91%) is roughly the same as for Community Foundations (94%, made up of 37% somewhat favorable and 57% very favorable)
- 67% of respondents believe DAFs widen the field for larger non-cash gifts, compared with just 4% who do not
- Respondents said DAFs do not cannibalize giving to other public charities by a 2:1 clip (43% to 20%) compared with those who say they do cannibalize other giving
“It’s long been our thesis at FreeWill that, given the explosive growth of DAFs in recent years, they could provide a safe harbor for enterprising fundraisers eager to continue to unlock transformational gifts during times of prevailing economic headwinds,” said Patrick Schmitt, co-CEO of FreeWill. “That time is now upon us, and our data shows clearly and convincingly that DAFs are rapidly becoming a focal point of fundraising efforts. FreeWill strives to serve this unmet demand for nonprofits aiming to get more involved.
“What’s more, the data also clearly challenges the popular misconception that DAFs are ‘frenemies’ for fundraisers, with DAFs driving positive sentiment in relative and absolute terms. We believe DAFs carry several key benefits for nonprofits and see real validation in our focus on building out an offering that enables and helps nonprofits leverage them to make a positive impact on society.”
Methodology
FreeWill’s survey is based on data collected from nonprofit fundraising professionals in January and February 2023. FreeWill surveyed more than 460 individuals from all organization sizes and cause areas. Further analysis of FreeWill’s survey is available in this report.
The preceding press release was provided by a company unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.
