# DAFs 101: What Are They, Why Do They Matter & Who Uses Them? > Get to know the basics of donor advised funds with our DAFs 101. This is a sneak peek of our Maximizing Donor-Advised Fund Giving Toolkit. - Canonical: https://givechariot.com/resources/insights/dafs-101-what-are-they-why-do-they-matter-who-uses-them - Published: 2023-06-08 --- ### What Is a DAF? A donor advised fund \(DAF\) is a specialized financial account used for charitable giving. It allows individuals to make a charitable contribution, receive an immediate tax deduction and then make grants to 501\(c\)\(3\) organizations over time. The money in a DAF can also grow tax free and be donated at any time in the future \- there are no time limits or distribution requirements for DAFs today. Anyone can set up a DAF \- either through companies that provide banking services \(Fidelity, Vanguard, Schwab, etc.\), newer startups dedicated to DAFs \(Daffy, Charityvest, Groundswell, etc.\) or often through local community foundations. There is currently $234 Billion sitting in DAF accounts ready to be donated \- because they have to be. ### Why Do DAFs Matter? **DAFs are massive, especially compared with other alternative forms of giving.** - Annual DAF giving is now nearly [**$46 Billion.**](https://www.nptrust.org/reports/daf-report/?gclid=Cj0KCQjw3a2iBhCFARIsAD4jQB3k7PTtS-A5uIqtZ9K84KIaUiTMbukfbdodsorYZG-TWjjB6rZ_xmsaAviXEALw_wcB) - DAF giving is now [**7x larger**](https://www.nptrust.org/reports/daf-report/?gclid=Cj0KCQjw3a2iBhCFARIsAD4jQB3k7PTtS-A5uIqtZ9K84KIaUiTMbukfbdodsorYZG-TWjjB6rZ_xmsaAviXEALw_wcB) than the Stock giving market. - DAF giving is now [**652x larger**](https://www.nptrust.org/reports/daf-report/?gclid=Cj0KCQjw3a2iBhCFARIsAD4jQB3k7PTtS-A5uIqtZ9K84KIaUiTMbukfbdodsorYZG-TWjjB6rZ_xmsaAviXEALw_wcB) than the Crypto giving market. **DAFs are the fastest growing vehicle in philanthropy.** - DAF giving is growing [**28%**](https://www.nptrust.org/reports/daf-report/?gclid=Cj0KCQjw3a2iBhCFARIsAD4jQB3k7PTtS-A5uIqtZ9K84KIaUiTMbukfbdodsorYZG-TWjjB6rZ_xmsaAviXEALw_wcB) in both 2020 and 2021. - The number of DAF accounts has nearly [**tripled**](https://www.nptrust.org/reports/daf-report/?gclid=Cj0KCQjw3a2iBhCFARIsAD4jQB3k7PTtS-A5uIqtZ9K84KIaUiTMbukfbdodsorYZG-TWjjB6rZ_xmsaAviXEALw_wcB) over the last four years. **DAF gifts are MUCH larger than other forms of giving.** - The average donation from a DAF is nearly [**$5k**](https://www.fidelitycharitable.org/content/dam/fc-public/docs/insights/2023-giving-report.pdf)**.** **DAFs are a reliable source of funding during economic uncertainty.** - The money in DAF accounts has already been set aside for charity and can’t be withdrawn for other purposes, so people’s propensity to donate from a DAF is **not as affected by financial pressure.** ### Who Uses DAFs? **Not just the ultra\-wealthy.** - While the average DAF balance is [**$183K**](https://www.fidelitycharitable.org/content/dam/fc-public/docs/insights/2023-giving-report.pdf)[,](https://www.fidelitycharitable.org/content/dam/fc-public/docs/insights/2023-giving-report.pdf)[**56%**](https://www.fidelitycharitable.org/content/dam/fc-public/docs/insights/2023-giving-report.pdf) of accounts are more [**less than $25K**](https://www.fidelitycharitable.org/content/dam/fc-public/docs/insights/2023-giving-report.pdf)**. ***\(*[*read more common DAF myths busted here*](https://www.givechariot.com/post/demystifying-dafs-busting-5-common-myths-and-misconceptions)*.**\)* **Not only much older people.** - The average age when someone opens a DAF is[**55**](https://www.fidelitycharitable.org/content/dam/fc-public/docs/insights/2023-giving-report.pdf), but the fastest\-growing group is [**younger than 40**](https://www.fidelitycharitable.org/content/dam/fc-public/docs/insights/2016-giving-report.pdf)**. ***\(*[*read more common DAF myths busted here*](https://www.givechariot.com/post/demystifying-dafs-busting-5-common-myths-and-misconceptions)*.**\)* **More active and engaged donors.** - People with DAFs are [**63%**](https://www.fidelitycharitable.org/content/dam/fc-public/docs/insights/2023-giving-report.pdf) more likely to donate. - People with DAFs contribute [**more than 11**](https://www.fidelitycharitable.org/content/dam/fc-public/docs/insights/2023-giving-report.pdf) grants per year, on average. - People with DAFs have [**24x larger**](https://institute.blackbaud.com/charitable-giving-report/online-giving-trends/#:~:text=The%20Charitable%20Giving%20Report%20continues,having%20solid%20increases%20in%202021) average donation size. **Expecting easy, digital process.** - **40%**of DAF donors at leading digital fundraising charity first donated with a credit card on their website.*\(According to private data shared from a global leader in online fundraising with Chariot.\)* - It's nearly universal that DAF donors also donate with credit card.*\(According to internal analysis of DAF holder feedback.\)* - [**96%**](https://www.fidelitycharitable.org/content/dam/fc-public/docs/insights/2023-giving-report.pdf) of DAF holders initiate their grants digitally. ### What's The Issue With DAFs? **Without Chariot, DAF giving is far below its potential, high\-value donors can have a poor experience & staff can be overburdened.** **Without Chariot, DAF giving is disconnected from broader fundraising efforts.** - DAF giving can’t happen at the point of inspiration \- a link from a friend, an instagram ad or an event. **Without Chariot, DAF gifts, which are **[**24x as large**](https://institute.blackbaud.com/charitable-giving-report/online-giving-trends/#:~:text=The%20Charitable%20Giving%20Report%20continues,having%20solid%20increases%20in%202021)**, are less likely from new donors.** - The most common reason to donate to a new org for a donation is because someone you know asks you. - However, there’s no way for a new donor to deploy DAF dollars through peer\-to\-peer platforms, in donation forms or at events where friends ask. **Without Chariot, it’s difficult to know who has a DAF & steward them accordingly.** - New DAF donors typically give with a credit card first \- leaving organizations in the dark as to who in their donor file has a DAF. - DAF gifts often arrive without clear identifying details and never with email contact information. - Even if a mailing address is included, thank you's are weeks delayed. - No one wants their highest potential donors to have a poor donor experience. **Without Chariot, DAF giving is a cumbersome process, which limits conversion.** - The typical DAF giving process without Chariot takes 15 steps, over 3 minutes and multiple redirects to complete.*\(According to internal analysis of existing DAF donation processes.\)* **Without Chariot, managing DAF gifts requires considerable staff effort.** - It can take weeks for checks to arrive at organizations, often without identifying details that create significant gift processing burden. - Fundraisers often have to follow up with major donors to make sure DAF grants are completed. **Without Chariot, efforts to engage donors will be structurally hampered.** - The most effective way to increase DAF donations is to educate donors about DAFs and how to use them. - But it's significantly less effective when explaining the DAF process is complex and so much time & effort is required to actually complete DAF gifts. **Without Chariot, an organization could be left behind.** - People follow the paths of least resistance and DAF donors will make more DAF donations where it’s easiest. ### How Do You Find DAF Donors? **Finding DAF donors is really all about making it easier for DAF donors to find you.** **1. Make it easier for donors to give with their DAF.** - Otherwise they'll most likely give a much smaller gift with their credit card, or worse, not give. **2. Increase awareness that you're able to accept DAF gifts.** - Market your capabilities to your donors and make the information prominent on your website & in communications. **3. Ask your donors about their DAFs.** - Don't be afraid to ask your donors in a survey or directly in 1x1 conversations if they have a DAF set up. **4. Include DAF giving options wherever you acquire new donors.** - In your donation forms, in your peer\-to\-peer fundraising pages and at live events \- DAF giving needs to be everywhere. **5. Most importantly... get started with **[**Chariot**](https://www.givechariot.com/getting-started-request)**.** Want the full toolkit on Maximizing Donor\-Advised Fund Giving? We created a step\-by\-step guide for you to make the most of Chariot for your DAF Fundraising. This toolkit is inclusive of: **Getting Started with Chariot** - We dive into setting up Chariot for maximum impact including best placement of the Chariot button on your website and other key tips. **Aligning Your Team** - We help you ensure every part of your organization is on board with your DAF strategy from example meeting agendas with your staff and executives to exercises for your board. **Spreading the Word** - We prepare you to effectively communicate your new digital DAF donation capabilities externally with talking points for 1x1 conversations, email templates, and social media post template downloads. **Letting Chariot Help** - We can support your team whether you need design help on your website, trouble shooting, or marketing assistance. **Rev Up Your DAF Engine** - We have some creative ways to accelerate your DAF giving that we can't wait to share with you. **Keep Moving Forward** - We make sure you are set on a clear path forward with a checklist, calendar, goal sheet, and key takeaways. ## Submit this form to receive the full toolkit: