How to handle gifts through donor advised funds

I've recently become the proud owner of a donor-advised fund. It's a nifty "product," managed by a financial services company, that allows you to park your giving in one place (one check, one receipt), then parcel it out the to causes you support at your leisure.

Speaking as a donor, let me tell you: It's darn cool, and hugely satisfying.

Your organization should be taking this kind of giving seriously.

There's a lot of money flowing through donor-advised funds. The Fidelity Charitable Gift Fund is the third-largest US nonprofit, right behind United Way and The Salvation Army. The fund run by Schwab comes in at #9 and Vanguard is at #16, and others are sprinkled throughout the Philanthropy 400 list of the largest of the largest nonprofits. Community and other foundations are a nonprofit version; there are hundreds of these, the largest of which is the National Christian Foundation.

Point is, more and more donors are choosing to give this way. Here are some things you should do about it:

Make it easy to give

• Is your organization's "real" name the same as the name people know you by? I've been thoroughly surprised by how often an organization I know and support is registered by a different name. That makes the organization hard to find. It also makes you wonder what the heck is going on with it.
• Make sure your tax ID number is easy to find. The donor needs it in order to make the gift.
• I'd put a page on the website called something like How to donate through a donor-advised fund or community foundation and make it easy to find.

Acknowledge donors correctly

• Anonymous giving is an easy option with donor-advised funds, so when gifts aren't anonymous, the donor expects to be acknowledged.
• Don't send a receipt. The donor was receipted when they deposited their money in the fund.
• Do send a nice letter. If the gift was large enough, assign a rep, or do whatever you do for large gifts.
• Offer the donor some choices: Does she want to be on your mailing list (if she isn't already)? Give communications choices, like how much and what type of contact you'll have with her. Don't assume the donor wants no contact -- but don't assume she wants contact either.

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Comments

[ephy torenberg]

"The person of the year" since we started the new millennium is "YOU" the consumer... today, there is much more power to a donor/family than before.

Through DAF, donors should be able to give to whatever charity they wish and care for, do it more strategically, get their financial adviser to manage their DAF money, see timely reports, connect with grants recipients... and much more...public charities and commercial DAF should not hold their donors/investors back... Ephy Torenberg www.donorfirst.org

[Bill Kennedy]

The United Church of Canada Foundation has been doing this for years. It is also helpful for bequests and the receipt of investments as donations. Smaller charities are not always capable of handling securities, so a donor can instruct that the Foundation forward part of the donation on to other charities.