How Donor Suggested Funds (DAF) Reshaping Greater Schooling Philanthropy

There’s a $38 trillion shift at the moment underway in American philanthropy, and it isn’t occurring by way of the mailbox. As Millennials and Gen Z develop into the recipients of the best switch of wealth in historical past, by way of inheritance, profession success, and different milestones of financial maturity, they aren’t simply altering who provides. They’re altering how they provide. Donor Suggested Funds (DAF) have gotten the giving technique of selection for these rising leaders, and as a present DAF donor and former annual giving practitioner I’ve expertise from either side of this equation.

I do know what it’s wish to be offered with a month-to-month management donor record out of your CRM, end up watching 50 entries from the neighborhood basis, and left questioning that are board members ready for a thanks. I additionally know the way it feels to direct a distribution to a trigger you’re deeply invested in and fear that one thing went mistaken when it takes a month for acknowledgement to reach.

Fortunately, methods and options are rising that handle the friction, complication, and mismatched expertise expectations and can tremendously improve the advantages to all nonprofits that undertake them.

The fashionable DAF panorama: A shift within the philanthropic “pockets”

DAFs are not a distinct segment device for the ultra-wealthy. With over 3.5 million DAF donors within the U.S. throughout all financial ranges, the DAF has develop into the popular automobile for a lot of rising leaders. The fastest-growing inhabitants of DAF customers is underneath the age of 40.

In accordance with knowledge from the forthcoming The Nationwide Alumni Survey for 2026, 82% of alumni are philanthropic both financially or by volunteering, but solely 35% made a present to their alma mater within the final yr.* This isn’t an absence of generosity; it’s a choice for impact-focused giving and fashionable gifting experiences. There’s an expectation for pace and knowledge that extra conventional strategies of present acceptance and stewardship can’t all the time match.

DAFs aren’t a parking zone for wealth. Donors, particularly youthful donors, are utilizing DAFs to be considerate, beneficiant, and strategic about their generosity and to generate the max profit for the organizations they assist. These donors know they wish to give, and it’s necessary that your group be in line with them by way of clear communication, customized outreach, and user-friendly distribution strategies.

 *The 2026 Nationwide Alumni Survey might be out there in March 2026.

The DAF alternative for fundraisers with DAF

DAF presents symbolize $12 billion in annual nonprofit income, whereas DAFs are sometimes related to main presents—and for good cause. Practically 70% of DAF presents are underneath $1,000, typically representing preliminary presents or stepping-stones to increased engagement along with your group. Stable stewardship and communication technique with these rising prospects are key to creating the mutual useful philanthropic relationship that can drive future pipeline sustainability.

You seemingly have donors now who’re contemplating or have just lately began managing their giving by way of DAFs and that represents nice alternative for you. In accordance with the 2025 Annual DAF Fundraising Report, donors who change from conventional strategies to DAF present a 10x improve of their whole giving to that group and have increased year-over-year retention charges in comparison with conventional donors (60% to 46%).

The message is evident: once you make it straightforward for a donor to offer by way of their DAF, they provide extra, they usually keep longer.

A five-step technique for holistic DAF success

1. Inform them: Your acceptance of DAF presents needs to be as obvious as your “Give Now” button and mailing handle for checks. Be certain that all of your workers are well-versed and acquainted with your DAF choices and insurance policies, this isn’t only a deliberate present function anymore.
2. Discover them: Decide how DAF donors are at the moment tracked in your CRM and implement new processes in the event that they don’t at the moment exist. Use wealth-screening or different key identifiers create lists of seemingly DAF customers and leverage particular advertising and marketing in appeals and workers outreach to assist these donors “self-identify” earlier than an official present is made.
3. Convert them: Whereas DAF donors are subtle and knowledgeable, 88% will nonetheless give outdoors their DAF for spontaneous presents. Many will abandon the method because of complication. If they’ve to depart the group’s website, log in to a portal, discover an EIN, and so forth., they may typically default to a smaller bank card present or lose the “giving second” solely. Tackle the friction by guaranteeing the “Give by way of DAF” possibility is as outstanding and straightforward as a bank card transaction.
4. Monitor them: The present distribution and reconciliation course of for DAF presents is a large number. From “thriller checks” to EFTs with no or restricted particular person donor knowledge we danger a myriad of adverse course of outcomes from inadvertent duplicate data, laborious/delicate credit score mismatch, to a worst-case state of affairs of not with the ability to thank a donor in any respect. We must be discovering and implementing methods that seize ALL the essential info at second of present so we are able to shortly acknowledge, reconcile, and develop the connection with these donors.
5. Develop them: As soon as you already know who your DAF donors are and they’re using this strategic technique to offer, ensure your donor relations and renewal communications are tailor-made to replicate this. You possibly can create particular recognition teams or ranges, craft donor affect tales centering on DAF assist, take part in particular occasions resembling National DAF Day, or construct customized challenges and matches into your current giving days or crowdfunding fashions.

What are you able to do immediately? Encoura + RNL ScaleFunder & DAFpay

Whereas constructing and executing a complete and sturdy DAF technique will take time and collaboration, addressing the important thing downside of friction for donors can occur now. Encoura+RNL is proud to supply Chariot DAFPay integration as part of our digital-giving-online-giving/”>ScaleFunder digital giving platform.

Conclusion: Use DAFs to make it even simpler for donors to offer

The shift within the donor panorama isn’t a future risk; it’s an energetic actuality. By bridging the hole between donor intent and a seamless digital expertise, your establishment isn’t simply modernizing a transaction, you’re securing your house as a prime philanthropic precedence for the subsequent era.

Watch our webinar, Starting at the Source: A Look into Data-Driven Paths to Donor Growth, the place we dive into extra element on insights about how DAF donors are altering the panorama to study extra.