What are donor-advised funds (DAF)?
Well, donor-advised funds are a popular choice for donors to give to their favorite charities. Tax deductions can be taken as soon as a donor puts money into a DAF, and the fund can grow until the donor decides where the money should go.
As an experiment, I tracked the donor stewardship practices of 16 of the top 25 charities for Fidelity Charitable donors, for over a year. I sent in my own $100 grants via my Fidelity Charitable account and tracked what kind of acknowledgements and follow up communications I received. (None of these organizations are NCDC members.)
Here’s a quick breakdown of my expectations and my observations.
My expectations were basic and were as follows:
- My grant would be immediately acknowledged as having been received.
- The charities would say when they received it and how much it was for.
- The charities would acknowledge the grant was received via Fidelity Charitable.
- I would begin receiving regular donor communications within 60 days.
What actually happened?
- 12 charities acknowledged my grants automatically. Of the 12, only eight of them had the correct language (the biggest mistake was giving me the letter version for a tax-deductible gift).
- We had to call and request a grant acknowledgment from five of the organizations. They indicated their CRM is set up to acknowledge the sender, but that Fidelity is flagged for no acknowledgments.
- We accepted the offer to send us a “manual” thank you letter from these five, and some of them sent a letter with the wrong wording. Again, a DAF donor cannot be told the grant is tax deductible. They already received a tax deduction when they put the money in their giving account.
- Three sent us welcome letters with an opportunity to give by mail enclosed or donor cultivation cards (nothing but affirmation/inspiration). 13 missed a natural opportunity to engage with a new donor.
- In the first two months since all gifts were received, we received one magazine from one organization and multiple appeals from just three organizations. It’s as if we didn't exist as a donor to the others.
What happened in all of these organizations? Why were there so many neglected areas of donor nurturing? And what can you check to make sure the CRM solution is supporting you in all the ways you need it for this type of donor?
As a new donor, I should have been feeling the love from these organizations and should now be receiving regular communications with opportunities for more donating but, after a year, some had not even acknowledged my donation!
Learn More About Donor-Advised Funds
Many NCDC members are doing a good job of inspiring additional giving through donor-advised funds. In this premium resource, I share tips and techniques for maximizing donations from DAF giving accounts.
You will also learn what a donor-advised fund is, how they work, and what you should be doing to ensure you are engaging in proper stewardship with these donors.