Donor-Advised Fund (DAF) giving growth is drastically outpacing other forms of giving for nonprofit fundraisers. In the 2024 DAF Fundraising Report, participants saw a median 4 year growth rate in Non-DAF giving of 1%, while the median DAF giving growth rate was 214% over the same time period. And signs show that this isn’t slowing down - Chariot conducted a poll of 100+ webinar participants and over 80% saw DAF giving growth in 2024 as well.
This week, Chariot’s Mitch Stein and K2D Strategy’s Karin Kirchoff hosted a webinar on arguably the most critical element of a nonprofit’s DAF strategy: DAFs and Gift Processing. DAFs are a type of “indirect” or “offline” gift, meaning they pass through a third party on their way from the donor to the nonprofit. Because of this, gift processors interact with every DAF gift and are responsible for all data entry related to this gift type.
In 2024, Mitch and Karin led the first ever DAF Fundraising Report, a study focused on analyzing nonprofit DAF data. Here are their two biggest takeaways:
DAF donors are critical to nonprofit success. They are deeply engaged in their personal philanthropy, displaying significantly higher loyalty, frequency and size of gifts. (Read this guide to learn more about characteristics of DAF donors.)
Nonprofits face challenges understanding the DAF industry and mastering DAF data.
(We are currently accepting applications for the 2025 DAF Fundraising Report – see more details at the bottom of this post!)
Without proper data tracking, there is no DAF strategy. For any nonprofit that is looking to grow their DAF fundraising, the place you have to start is with Gift Processing - that includes your database admins, development operations, finance, and prospect research. Mitch put it succinctly: “DAF strategy all comes down to gift processing – it underlies everything.”
“DAF strategy all comes down to gift processing – it underlies everything.”
In the session, Mitch and Karin discussed the four biggest hurdles to effective DAF gift processing and some of their best solutions:
Inadequate Stewardship
Lackluster Analysis
Sweeping Attribution
Complex Guidelines
Inadequate Stewardship
Despite the importance of DAF donors, the extra steps required to identify them often leaves them overlooked. Many organizations have also been misinformed about the best practices and requirements around DAFs. Here are two most common issues that arise:
Nonprofits often fail to code DAF gifts as contributions made by individuals. Instead, they record the DAF provider that dispensed the funds, like Fidelity Charitable or Schwab Charitable / DAFGiving360. As a result, individual donors go unrecognized and fall through the cracks.
Organizations have limited visibility into DAF donor identities, as most DAF providers don’t share a donor's name or contact information. Instead, they provide the fund name, which can range from descriptive (e.g., Mitch Stein’s Fund) to vague (e.g., The Puppies & Kittens Fund), making it difficult for nonprofits to connect with the donor.
Solutions:
Gift processors should create both a hard and soft credit for all DAF gifts where possible. The hard credit should go to the DAF provider, like Fidelity Charitable, and the soft credit should go to the individual donor. If it’s a peer-to-peer fundraising setting, there can also be “soft-soft” credits for the participant fundraiser.
Take proactive steps to uncover the identities of your DAF donors where more digging may be required. Check in with teammates if they were expecting a gift, or try to match the address or fund name with other records in your database if the individual name isn’t provided.
If there’s no way to identify a donor, you can always send their thank you to the DAF Provider and request for it to be passed on. Most DAF Providers, especially smaller or community focused ones, will offer some help here if the thank you is personalized in some way and not just a standard form email.
See if your fundraising platform offers DAFpay, Chariot’s DAF payment solution, which automatically captures donor names and emails.
Lackluster Analysis
Rather than being treated as a unique category, DAF gifts are often processed the same way as other “offline” or “indirect” gifts, like QCDs, payroll giving, corporate matching, etc.This makes it impossible to analyze your DAF giving data, assess effectiveness of different fundraising strategies and iterate on your work.
Solutions:
Implement a yes/no tag for DAF gifts in your CRM to enable tailored workflows and reporting.
Only mark DAF gifts as anonymous if there’s truly no identifying information whatsoever, and make sure you can separate out anonymous gifts in your database. A “yes/no” flag for anonymous works well for this capability.
Only bucket true DAF Providers that individuals hold accounts at and recommend grants from in this group, not other entities that use the legal DAF structure to send gifts (like Backbaud Giving Fund or Benevity).
Follow a standard naming convention for DAF providers so that all gifts from a specific provider can be pulled into the same search. Utilize Chariot’s DAF Provider Directory for a comprehensive list.
Top Tip: If you’re struggling to differentiate QCDs from DAFs, remember that QCDs are sent out of 401k accounts held at financial brokerage firms, where DAFs are always held by a charitable entity. So the name of the institution will be Fidelity Charitable for a DAF and just Fidelity for a QCD, for example.
Sweeping Attribution
Many nonprofits automatically classify DAF gifts as “major gifts.” This leads to two primary issues:
Many DAF gifts don’t originate from the major gifts pipeline. Instead, they come from broader fundraising efforts like direct mail campaigns, peer-to-peer fundraising, or event participation. Misclassifying these gifts as major gifts skews your organization’s understanding of donor engagement and weakens your overall fundraising strategy.
When DAF gifts are exclusively credited to the major gifts team, it can create silos within your organization. Other teams—such as annual giving, events, or digital fundraising—may feel less motivated to promote DAFs as a giving option, even though they play a critical role in inspiring these gifts.
Solution:
Track the source of DAF gifts just like you would any other gift, and attribute them to the appropriate campaign or effort.
Complex Guidelines
When it comes to DAF gifts, nonprofits must navigate two key sets of legal guidelines to ensure compliance:
DAF Restrictions
DAFs come with specific rules that nonprofits must follow. For example, DAF gifts cannot be made in exchange for any material good, like a gala table. While turning down a gift from a donor might be uncomfortable, it’s crucial to abide by these restrictions in order to preserve your organization’s tax status.
Receipting Rules
Nonprofits should not send tax receipts for DAF gifts to the individual donor. Since the DAF provider (e.g. Fidelity Charitable) is the entity disbursing the funds, they are responsible for issuing tax documentation. Sending a tax receipt to the donor could create confusion or legal complications.
You do still want to send the individual donor a thank you - it is a very common DAF donor complaint that they don’t hear anything from the nonprofit after making their gift.
You do not need to send a thank you to the DAF Provider - they do not review these documents, so it is a waste of your time and paper.
Solutions:
Download Chariot’s Gift Acceptance Policy and adapt it to fit your organization. If anyone – whether a donor or a fellow fundraiser – feels uncertain about the rules, refer to the policy’s terms.
Use the same yes/no DAF tag mentioned above to immediately flag gifts that don’t require tax receipts and trigger a unique workflow
For more insights on the challenges of DAF data and how to build a comprehensive flow for optimal management, visit our detailed guide.
Proactive Strategies to Optimize Gift Processing
Beyond those specific tips, here are proactive strategies to optimize gift processing at your organization:
Leverage Technology
Check if your fundraising platform offers DAFpay, Chariot’s DAF payment solution, which automatically captures donor names and emails, making it easier to track and acknowledge DAF gifts. (Learn more about how to access DAFpay in this guide and see the power of real-time DAF stewardship in this case study with Michael J. Fox Foundation.
Capture as Much Data as Possible
Prioritize gathering comprehensive details about DAF gifts. Establish a system that tracks the source of a DAF gift, the donor’s intent, and any relevant campaign details to gain a clearer picture of your fundraising efforts.
Engage your team
DAF giving shouldn’t be siloed within one department. Train your entire team—from annual giving to events—to understand how DAFs work and how to promote them as a giving option. When everyone is equipped with the right knowledge, your organization can better engage DAF donors and maximize contributions.
A great way to engage your broader team is to hold periodic DAF gift review sessions monthly, when Gift Processors can flag gifts where the individual donor can’t be identified and the broader team can weigh in on any leads.
Participate in the 2025 DAF Fundraising Report
By participating, you'll gain exclusive access to:
Unique Insights – The only DAF research built from nonprofits’ own data, offering an unparalleled look into DAF giving trends.
Expert Evaluation – Industry leaders will assess your data practices, helping you uncover opportunities for improvement.
Peer Benchmarking – Compare your DAF giving trends against similar organizations to better understand your performance.
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