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With Boomer wealth at record breaking levels, you are getting gifts from donor-advised funds (DAFs) and qualified charitable distributions (QCDs). If your development strategy doesn’t include a proactive approach to DAFs and QCDs, you’re missing key opportunities to engage donors at every level, from annual giving to major gifts and capital campaigns.
This is an element of a presentation by Tim Logan, ACFRE, FAHP, FCEP, senior legacy director at Mal Warwick Donordigital, during the recent Association For Healthcare Philanthropy annual conference.
You want to work with your Development Services team or your caging company to identify DAF gifts, Logan told the attendees. When you see a gift from a fund sponsor, Vanguard, NPT, etc., you should assume that the check is from a DAF grant or multiple DAF grants. You should reach out to the sponsor and ask for the donors’ names if they weren’t provided.
You might think that DAF donors want to be anonymous, but according to the National Survey of Donor Advised Fund Donors by the DAF Research Collaborative (DAFRC), only 3% of DAF donors remain anonymous when they make DAF grants.
The most important thing you can do is attribute DAF grants to donor and source, Logan suggested. This ensures that you have a complete profile of your donor’s support. The credit for the gift will go to the fund sponsor, i.e. Fidelity, the local community foundation, etc., but you should give a soft credit to the donor. The soft credit should indicate that the gift is a DAF grant.
Make it easy for donors to give from their DAF. Include a DAF reply box on your direct response pieces. A DAF is just another payment type, like a check or a credit card. So, you don’t need to know who has a DAF. Logan urged attendees to put this on all your pieces, just like you include a credit card. Add a PS asking donors to use their DAF to make a gift. Add a DAF widget to your website. More than 90% of DAF grant requests are initiated electronically, so having a tool like a DAF widget makes it easier for your donors to send a grant to you from their DAF.
In planned and major giving, you will want to encourage your DAF donors to name you as the successor beneficiary of their DAF, according to Logan.
QCD donors 70.5 years of age or older can make a gift from their IRA to your organization. The gift comes straight from their IRA to your organization. It’s called a Qualifying Charitable Distribution. QCD giving is exploding for organizations who are promoting it.
The key to QCDs, he said, is marketing. Data show that just the mention of IRA gifts or QCD gifts to donors older than age 70.5 is effective. You don’t have to do a fancy package. Just sending a postcard to donors older than age 70 is effective. Send emails and use Facebook ads.
The maximum amount a donor can give in 2025 is $108,000. So, you can run a report on the QCD donations you have received. Look at the size of the gift. For those donors who are giving $100,000 from their IRA, they are giving close to the maximum. That could be a sign they really support your mission.
As with DAFs, you will want to encourage your QCD donors to name you as the beneficiary of their IRA.
Know that 72% of DAF donors do not want to be anonymous, according to analysis from Squarespace. They want to be acknowledged for their gift; they are open to learning more about your work and your mission. So, whether the gift is from a DAF grant or an IRA distribution, don’t forget to say thank you and to tell the donor about your mission, Logan told the attendees.
