Mitch Stein, head of strategy at Chariot, to discuss the impact of Donor Advised Funds (DAFs) on nonprofit fundraising. Mitch introduces Chariot, a platform dedicated to helping nonprofits maximize their fundraising potential from DAFs. He emphasizes the growing significance of DAFs in philanthropy, citing staggering figures—$230 billion in DAFs across over 1100 funds in the U.S., with contributions and grants increasing at an average rate of over 20% annually.
Mitch breaks down the diverse landscape of DAF donors into three categories: “tubs,” “tanks,” and “towers.” These distinctions reflect the varied approaches donors take to managing their philanthropy through DAFs, from recurring contributions to one-time large donations or even as alternatives to private foundations.
One of the key takeaways is the accessibility of DAFs beyond just the wealthiest individuals. Mitch highlights that over 3 million people utilize DAFs, and the average DAF account holder makes nearly 12 gifts per year, with an average value significantly higher than traditional online credit card donations.
The conversation digs into strategies for nonprofits to engage DAF donors effectively. Mitch stresses the importance of education and awareness within the sector, as well as the need to identify and communicate with existing DAF donors within an NPO’s network. He also emphasizes the significance of making the donation process as seamless as possible, with tools like Chariot’s DAFpay simplifying the giving experience.
Moreover, compliance and ethical considerations are highlighted as critical factors to navigate, particularly as legislation around DAFs evolves. Organizations must ensure they adhere to regulations to maintain their 501(c)(3) status and protect against potential risks.
As the conversation wraps up, Mitch provides insights into how nonprofits can integrate DAFpay into their fundraising strategies, stressing the importance of prioritizing DAF giving and making resources readily available to donors. He also touches on the emerging trend of companies offering DAFs as employee benefits, further underscoring the importance of incorporating DAFs into nonprofit fundraising strategies.