Giving Compass, a nonprofit platform helping donors make more informed and impactful charitable donations, partnered with Dr. Sara Konrath from the Lilly Family School of Philanthropy to release a landmark new study: “Donor Satisfaction and Unlocking Public Sector Funding from DAFs.” The study explores the psychology of DAF donors, identifying the key factors that propel DAF giving – and what hinders it.
Chariot’s Head of Strategy, Mitch Stein, served on the study’s Advisory Committee, lending his expertise on DAFs and donor behavior.
We’ve rounded up our key takeaways and the top action items for nonprofits below:
1. 97% of DAF donors do some kind of diligence before giving.
DAF donors are intentional about their giving – all aspects of it! We know they’re thoughtful about how they allocate their funds towards charity, so it shouldn’t be surprising that DAF donors also seek to maximize their impact by researching the most effective nonprofits.
The two most popular ways donors sought information were word of mouth and Google search.
Action items:
Can your supporters easily share the positive impact of your organization?
Have you published impact stories that supporters can retell?
When someone searches your organization on Google, do you know what they find?
If someone searches your organization + “DAF,” does your DAF page come up?
2. 68% of DAF donors are motivated by long term impact.
"Impact means change, so things don’t just continue as they are. So how does my donation make a change?"
Report Participant — Anonymous Female Donor, Age 55
When asked how they understood impactful giving, 68% of DAF donors focused on the sustained long term effects of their donation – the top three answers were improving people’s lives, advancing a nonprofit’s mission, and contributing to long term change.
These donors are involved with philanthropy for the long haul. And often, it’s not lack of funds that stops them from giving, it’s lack of trust. Donors want to see how their gifts are making a difference.
Action items:
How are you building trust with your past and future supporters?
Does your public messaging clarify the urgency of your mission and long-term potential of your organization?
Do you invite donors to in-person events to see the work of your organization firsthand?
3. 37% of DAF Donors didn’t use their DAF to make their most recent donation, citing extra steps.
Even though a DAF donor made the extra effort to set up a dedicated financial account for their philanthropy, they still are deterred from using their DAF when it isn’t easy.
A participant in the Giving Compass study described this scenario:
“I didn't use my donor advised fund because there are just many more steps with the donor advised funds, and frankly, I often forget that it's there. So when I'm asked in the moment to donate or if something comes up, it's so easy just to start the process and put my information, and by the time I'm finished, I have forgotten that, oh, yes, I have a donor advised fund to pull from.”
Report Participant – Anonymous Female Donor, Age 52
Many DAF donors use DAFs for their planned annual gifts – the ones they decide to give when contemplating their yearly financials. However, when they come across a worthy cause more spontaneously—perhaps through a friend, family member, or local nonprofit—they give with a credit card instead of a DAF due to the extra steps required.
This trend presents a significant missed opportunity for organizations that don’t get those DAF gifts. The 2024 DAF Fundraising Report found that the same donor’s gift size increased an impressive 96% when they started giving through their DAF. So, what can nonprofits do to encourage donors with DAFs to always use them for giving, spontaneous gift or not?
Ensure that the process of giving to your organization through a DAF is a breeze!
Action items:
Does your ways to give page feature information about DAFs?
Do you have your nonprofit’s EIN easily discoverable on your website - especially on your DAF ways to give page?
Have you checked if your fundraising platform has DAFpay available? If not, have you requested they add the integration? DAFpay eliminates the extra steps required for DAF gifts and facilitates donation via DAF in just 3 clicks!
4. 84% of DAF donors who chose not to use their DAF for their most recent donation were making a gift to a local organization
Too often, DAF donors are opting to give through an alternate method than their DAF, especially when supporting small or local organizations. This tendency is further demonstrated by the fact that 57% of donors surveyed confirmed they support large and international organizations from their DAF - 25% of them supporting one of the same 3 organizations!
This highlights a huge opportunity for locally-based nonprofits: the $230 billion dollars in DAFs should be distributed equitably amongst larger and smaller nonprofits, rather than disproportionately benefiting the larger ones.
What can local nonprofits do to reach new DAF donors? There are likely many DAF donors in their donor files that aren’t yet using their DAF to support them - as this study’s data reminds us. The best way to get those donors to use their DAF is to remind them and make it easy.
Action items:
Do you send emails to your donors highlighting the ability to support your organization through a DAF?
Does your website include a banner, dedicated page, or section on your main donation form that provides the same information?
5. 98% of donors were positively impacted when shown a video about an organization they might give to.
One of the challenges to get DAF donors supporting more small and local organizations is making sure they have enough information to feel confident in their gift’s impact. This study showed that when participants watched a video about an organization, 15% more people felt they had sufficient information to donate compared to when they only read an excerpt about an organization’s mission. Video storytelling is highly motivating to DAF donors, particularly for smaller organizations that are new to them.
More donors reported feeling informed about an organization after watching a video than reading an excerpt, even when the video focused on a preselected organization and the excerpt described an organization they had personally chosen to explore.
Action items:
Have you tried using a video to communicate your nonprofit’s message?
Are you staying up-to-date on the latest marketing tools and surveys in order to enhance your marketing strategies?
Do you test different messaging strategies with your audience (text vs. video, image vs. no-image, etc.)?
6. 54% of DAF Donors view themselves as experts – and experts give more.
We know that DAF donors are highly intentional with their philanthropy - they went out of their way to set up a separate, restricted financial account just for giving. These findings are also an important reminder that DAF donors identify as “smart” givers, and as that sentiment grows, gift size increases!
The Giving Compass report cited a Bank of America study that found that the amount given by a donor correlates to the level of knowledge that the donor considers themselves to have on the causes they are supporting. A self-reported “expert” gives $43K on average, someone “knowledgeable” gives $14K, and a “novice” gives $2K.
Action items:
Do you segment your donor base in order to communicate a tailored message with your DAF donors?
Does your messaging communicate how your organization is the “smart” choice for this kind of donor, with specifics on your mission and impact?
Do you send thank you messages to your DAF donors (instead of tax receipts!), thanking them for their donation and recording that they gave via DAF? (“Expert” donors have high standards and effective stewardship should be a high priority!)
7. Only 10% of “affluent” households use DAFs – we’re at the very beginning of this wave!
While the number of DAF accounts has increased by 9x in the past 10 years (according to National Philanthropic Trust), there’s likely to be significantly more growth on the horizon. While DAFs are increasingly accessible to all types of donors, there’s still a huge growth opportunity among their traditional audience: affluent households. According to the study conducted by Bank of America, cited above, only 10% of affluent households are using a DAF today, and the remaining 90% are likely to find significant value from DAFs – they can streamline their philanthropy, increase their generosity, and optimize their taxes.
Action items:
Are you discussing DAF giving in your 1x1 donor conversations?
Is your staff comfortable talking about DAFs with your donors?
Have you joined DAF Day, a national giving day dedicated to DAFs on October 10th, 2024 that’s engaging all kinds of donors in DAF education?
This report provides an incredibly valuable addition to the growing list of research on DAF giving. It offers a unique and quantitative look at DAF donor behavior across a wide range of demographics that can help any nonprofit improve their DAF fundraising strategy. To dive deeper into all of the data and insights, download the full report here.
If you’re interested in more DAF research, check out other recent summaries:
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