While Donor-Advised Funds (DAFs) have been around for nearly 100 years, their popularity has soared recently – with the number of accounts up 9x in the past 10 years. DAFs are tax-advantaged giving accounts that allow you to make tax-deductible contributions of cash or assets up front, invest the assets in the account, and make grants to eligible nonprofits over time. 

DAFs are an increasingly popular choice because they streamline your philanthropy and are proven to expand your giving capacity — due to their tax advantages, their investment growth, and the accountability they offer donors. The 2024 DAF Fundraising Report, led by Chariot and K2D Strategies, found that when a donor switched to giving with a DAF, their support of a nonprofit increased by 96%, on average, as covered by Barrons. 

A major reason for the recent focus on DAFs is the increasingly easy, social, and connected ways that a DAF can be used online. Historically, when DAF users were inspired to give in a more spontaneous fashion (a friend’s marathon fundraiser, a cousin’s birthday campaign, etc.), they opted to use their credit card instead of their DAF. In fact, the recent Donor Satisfaction Report from Giving Compass and Dr. Sara Konrath of the Lilly Family School of Philanthropy found that 37% of DAF donors surveyed did not use their DAF for their most recent donation, citing the extra steps required. 

That’s all rapidly changing with five exciting new initiatives, features, and industry collaboration:

1. DAF Day on 10/10: The First-Ever Global Giving Day Dedicated to Donor-Advised Funds

One of the biggest challenges that DAFs face is that they are not very well known or understood. Only 17% of Americans know what a DAF is (according to a recent poll), 42% of nonprofits don’t mention DAFs in any of their communications (according to a recent survey), and 37% of people with DAFs don’t use them in a given year (according to recent research). 

In 2024, a group of leading nonprofits, DAFs, and fundraising technology providers got together and created DAF Day on October 10 to help address the DAF awareness problem. The movement now has over 1,000 nonprofits participating, reaching millions of donors to educate them about DAFs and encourage them to join this collective moment to demonstrate unprecedented generosity with Donor-Advised Funds.

This initiative is making waves in the sector, with coverage in Axios, Forbes, and The Chronicle of Philanthropy. Anyone with a DAF is invited to join the giving celebration. You can learn more, sign up, and find participating organizations to support with your DAF at www.dafday.com. 

2. Higher Impact DAF Giving in Moments of Crisis

With devastating weather events up-ending communities around the US recently, DAFs have become a critical way in which dedicated philanthropic dollars can be deployed to support those most in need. Platforms that facilitate crisis response giving, like GoFundMe, have even added a DAF payment option called “DAFpay” which lets DAF donors give with their DAF in three clicks. Donors’ gifts appear on the campaign page in real-time, and the benefitting organization can incorporate those dollars into their crisis response immediately. When these gifts are made from a DAF portal instead, it can take days or weeks for the recipient to know anything about it. 

You can learn more about GoFundMe.org’s crisis response work and how DAFs support it here.

3. DAF Donor Participation in Peer-to-Peer Fundraising

The most common reason people give is because they are asked—and the most common reason people ask is because they are participating in a fundraising event themselves. Between bike rides, walks, and even mustache-growing challenges, billions of dollars are raised for charity each year through this phenomenon, which is commonly referred to as “peer-to-peer” fundraising. 

Peer-to-peer fundraising is so engaging because it’s social, it’s time-bound and it’s personal. Unfortunately, DAF donors have often been left out of that experience because it’s so time-consuming to make sure a DAF grant ultimately gets attributed to a specific person’s campaign. However, many of the country’s largest events, like Alzheimer’s Association’s Walk to End Alzheimers, The Pan-Mass Challenge, Susan G Komen’s 3-Day, and March of Dimes March for Babies now have DAFpay as a core integrated payment option that gives a DAF donor the same level of engagement as someone using a credit card. 

In fact, one donor and 37-year veteran of the Pan-Mass Challenge was so excited about using DAFpay to give to the ride this year that he wrote an article in Forbes about how it’s even easier than a credit card.

4. Real-time DAF Gifts for Giving Day Campaigns

It’s not just DAF Day that encourages DAF giving on a particular day. Organizations around the country are making it easier and more engaging for donors to give from their DAF and show up in the real-time tracker for time-bound campaigns. From schools to athletic clubs, thousands of organizations are combining the potential of DAF giving with the competitive spirit and camaraderie of these events. Community Rowing Inc. in Boston is now getting more than 30% of their giving day fundraising on Givebutter through digital DAF gifts, driving 100% of their year-over-year growth.

5. Take Advantage of the Record High Stock Market

There’s no better time to contribute non-cash assets to your DAF, like stock and mutual fund holdings, than when the market is at record highs. You can capture three layers of tax benefits - deducting the total face value of the securities from your taxable income this year, avoiding any capital gains tax that would’ve been owed if the securities had been sold outright, and the money in your DAF account will continue to grow tax-free! 

This is the perfect time to review the biggest winners in your portfolio, discuss with your financial advisor, and contribute to your DAF before year-end. Explore ways to contribute to your DAF in this helpful overview from Fidelity.