For the past 10 years, the number of DAF accounts has grown an average of 85 percent each year, with no signs of slowing down. That means the 3 million people using DAFs today will likely grow to the 60 million who use 401ks in the years ahead.
As DAFs gain popularity, nonprofit organizations of all sizes are looking for direction on the best way to engage with this fast growing tool for giving. Now, fundraisers can look to fresh data that illuminates just how impactful DAF donors can be.
We sat down with leaders from across the nonprofit sector to delve into the most recent DAF data from the 2024 DAF Fundraising Report, along with case studies featuring the March of Dimes and Pan-Mass Challenge.
We spoke with:
Karin Kirchoff, President & Founder of K2D Strategies
Karyn DeMartini, VP of Major, Principal and Planned Giving at March of Dimes
Michele Sommer, CFO at Pan-Mass Challenge
Mitch Stein, Head of Strategy, Chariot
If you’re part of the 42 percent of nonprofits that don’t mention DAFs in their marketing or if your DAF fundraising initiatives could use a serious upgrade, read on to see the numbers that show why you should join us in celebrating DAF Day on October 10th.
DAF Day is a dedicated day of giving when donors, nonprofits, and DAFs band together to show the collective power of DAF giving. Register your organization to spark excitement for DAF giving in your community today.
Now that you’ve joined the movement, let’s learn ten ways DAFs are transforming the fundraising landscape—and what that could mean for your organization.
1. DAFs can be used as a core “payment” option for online fundraising
Up until recently, the DAF giving process was a time-consuming, multi-step process that placed a middle person managing the DAF account between the donor and the organization.
Now, you can give donors a better way to DAF online with DAFpay. No more sending DAF donors away from your webpage to make a gift. Simply add a DAFpay button to your donation form and they can make a DAF donation in just three clicks. It’s as easy as paying with a credit card. And best of all, your nonprofit gets the donor’s details instantly so you can say thanks directly when it matters most—the moment they choose to give.
2. DAFs are a main source of growth for many nonprofits
According to Giving USA, inflation is impacting more than grocery prices. Individual giving declined 2.4 percent in 2023 when adjusted for inflation, which left many nonprofits seeking effective ways to fill in the revenue gap—that’s where DAFs have made a major difference. The 2024 DAF Fundraising Report found that while 50 percent of organizations that experienced a decline in non-DAF giving between 2019 and 2023, one-third fully offset the decline with DAF revenue growth.
Among participants in the report, median DAF growth was an incredible 214 percent compared to just one percent growth in non-DAF donations. Pan-Mass Challenge weathered the downward trend in non-DAF giving by investing in DAF initiatives. Today, DAF gifts amount to a jaw-dropping 47 percent of its year-over-year growth.
3. DAF gifts are much, much larger—even when they’re given online
Your team likely spends a tremendous amount of your limited time and resources striving to increase online donations, but if you’re not intentionally driving more DAF giving, you’re probably missing out on a big opportunity.
In the DAF Fundraising Report, DAF gifts were 20 times larger than non-DAF gifts, on average—and that’s excluding major gifts over $25,000! This stark contrast remains when looking at online giving alone. The overall industry average for credit card gifts is just $204, while organizations like March of Dimes see digital DAF gifts through DAFpay averaging $1,100.
Even Pan-Mass Challenge, who pioneered digital DAF giving with a more rudimentary solution in years past, saw a 27 percent increase in average digital DAF gift size once implementing DAFpay at the start of 2024. Seamlessly embedded DAF giving resulted in 5,000 digital DAF gifts from donors using over 100 DAF providers that were new to the PMC.
The secret sauce to increasing average gift size with DAF giving? Go digital and make it easy.
4. DAFs increase generosity
Every organization hopes to inspire donors to give more money and give more often, and DAFs have an edge. The 2024 DAF Fundraising Report studied 16,000 instances of donors who opened DAF accounts in favor of individual giving, and here’s what it showed:
Giving increases 96 percent when a donor sets up a DAF
Median giving increases by 78 percent
The top 25 percent of DAF donors increase their giving by over 200 percent
These numbers are mind-blowing, but when you consider the idea of a DAF, they make perfect sense. A DAF is an investment account specifically designed for charitable giving, so DAF holders already have funds set aside to allow them to be generous at any time. When you ask, they’re ready to give.
Currently, over $230 billion in DAF funding is available to make a difference—it’s up to you to remind your donors about the impact they can make through DAF giving.
5. DAF donors give more frequently
When a donor sets up a charitable giving account, supporting the causes they care about becomes more of a lifestyle than a once-in-a-while gesture. DAF donors give throughout the year—for birthdays, holidays, and, of course, in response to your personal outreach and campaigns.
According to the DAF Fundraising Report, 30 percent of DAF donors give two or more gifts to the same organization every year. The easiest way to encourage repeat DAF gifts? Put DAF giving front and center on your donation pages.
For example, one DAF donor gave a $5,000 donation through the Ways to Give page on the March of Dimes website using the DAFpay button. Just two months later, that donor gave a second DAF gift of $750 just two months later on a March for Babies campaign page using the DAFpay option once again.
6. DAF donors have higher retention
Acquiring a new donor can cost anywhere from 50-100 percent of their first gift, so ensuring first-time donors give again is essential to the longevity of your organization.
The 2024 DAF Fundraising Report reveals that a DAF donor has an average retention rate of 60 percent. That’s a 15 percent higher retention rate than one-time donors, meaning the effort you spend promoting DAF gifts can generate ROI well beyond that first gift.
7. DAF donors are “hiding” in your donor community
Many of your donors would gladly give via DAF if they knew it was an option. In the report, 26 percent of DAF donors previously gave to the same organization with a credit card. (Note that this data is collected from a five-year window, so this is likely an underreported number.)
Much of this is due to many DAF donors simply forgetting about their giving account. On average, 37 percent of DAF accounts are left unused in any given year—but you can bet they gave donations with their credit card during that time.
Fortunately, keeping DAF gifts flowing to your organization isn’t an uphill climb when you approach it as a team. When it comes to growing your DAF impact, education is key. Here are several ways to educate everyone in your community:
Rally your staff around the undeniable impact of DAFs. From your board members to your volunteers, everyone should know what a DAF is and its benefits and communicate about DAFs to anyone who will listen.
Give donors simple, scannable, 101-style information about DAFs and DAF giving. Let them know the possibility of recurring DAF gifts, along with the ease of giving stocks and cryptocurrency through a DAF account.
Make DAF giving an option for every campaign by adding a DAFpay button to all of your donation pages.
Launch a DAF Day campaign to shine a spotlight on DAF giving across your organization.
8. DAF donors deserve better stewardship
A recent study conducted a DAF “Secret Shopper” experience, making DAF gifts ranging from a hundred to a thousand dollars for 25 organizations. It tracked every step of the DAF donor experience, from gifting to acknowledgements.
Without a DAFpay option, the giving process for all organizations was needlessly time consuming and complex, and recipient access to donor information was anything but instant. Acknowledgements took a very long time, leading to a disappointing donor experience. One large nonprofit sent an acknowledgement three months after receiving a gift—and they had sent three solicitations in the interim.
Many organizations sent solicitations following the DAF gift, but not one made a specific ask for a future DAF gift. The organizations only asked for a gift in generic terms.
The main takeaway? DAF donors deserve a whole lot better. Consider your DAF donor experience and how you can improve it:
How easy is the act of DAF giving?
How soon are donors thanked?
What does solicitation look like following their gift?
By putting yourself in the shoes of DAF donors, you can discover opportunities to retain these valuable supporters for years to come.
9. DAF data offers a wealth of opportunity
Your DAF data can serve as the foundation for your most successful fundraising initiatives, but chances are, it’s probably somewhat messy and incomplete.
Think about it: if a DAF donor gives from their DAF account through Fidelity, your organization is tasked with recording and organizing three players around a single gift. And without a set process, each staff member can label who gets the hard credit and who gets the soft credit differently—or not record the extra players at all.
Before diving into your DAF data, you need to rally your team and decide on a process for these often complex gifts. Next, review how your CRM currently manages DAF gifts. Is it recognizing DAF gifts or labeling them as one-time donations?
Finally, zero in on those DAF gifts with the cryptic donor names. If you see a DAF gift from a name like “The Puppies Foundation,” create a team similar to your moves management team to investigate. With minimal outreach, they’ll likely come across a staff member or volunteer who will know the real person behind the name.
Moving forward, you can future proof your DAF data collection by encouraging digital DAF gifts. When you add the DAFpay button to your giving pages and donation forms, DAF donors who give instantly send their name and email address to your nonprofit along with their gift. Best of all, this data can flow into your CRM with every detail labeled properly for thank yous, acknowledgements, and future solicitation.
10. DAF gifts can power your peer-to-peer campaigns
For many organizations, peer-to-peer campaigns generate so much buzz and revenue because it lives at the heart of fundraising—real, meaningful, personal relationships. But when you ask your donor community to fundraise for you, it’s important to set them up for success, especially when you want to encourage giving from DAFs.
In addition to the top benefit of spotlighting DAF gifts as an option directly on donation forms, Pan-Mass Challenge equipped their bike-a-thon fundraisers to solicit DAF gifts in the easiest way possible—by allowing supporters to give from their DAFs online the same way they would from their PayPal accounts, from a vast variety of DAF providers.
Spark DAF giving at your organization
The numbers speak for themselves, but let us help. DAF giving is the future, and now is the perfect time to get on board with DAF Day just weeks away. Start the year’s most promising campaign by sharing this blog post with your organization’s leaders today.
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