You know I’m all for small monthly gifts, but two years ago I became intrigued with donor-advised funds, especially after I received some DAF-focused email newsletters from Jack Doyle from Amergent. I highly recommend reading them.
Based on Fidelity’s “2020 Giving Report,” the number of donors who have a DAF has almost tripled over the past 10 years, and more and more Millennials have opened an account.
When I did the research to see what was best for me, I was pleasantly surprised that it doesn’t take a huge amount to get a DAF started — $5,000 is the minimum for new funds, and you can feed it from your other investments.
So I established a DAF, the Waasdorp Giving Fund, with Fidelity with an investment of $5,000. It was a good tax decision at the time and a good way to familiarize myself with this type of giving.
What’s also exciting is that it is also possible to make monthly gifts from your DAF.
The amounts are a little higher than the typical $24 a month you see for monthly gifts. It must be at least $50 a month, but this may still be very doable for donors, and it can be that mid-level program you’ve been meaning to grow.
Of course, like anything you do in fundraising, you must plant some seeds. You must let donors know that this is another way they can help. Find the donors who have sent you gifts through their DAF and consider a special message to them.
Here’s one example Jack shared from a P.S. in a thank-you letter.
An example from Jack Doyle of Amergent, sharing that donors can give monthly through DAFs. | Credit: Amergent
How about trying a version of the above approach in your thank-you letters going out after this busy giving season. It doesn’t cost you anything to do, and it could generate a minimum of $600 a year.
Do make sure you have your processes in place as a DAF gift is not tax-deductible, so you can’t send the standard thank-you letter. When you fund or add to the DAF, that’s when the gift is tax-deductible.
Also, not every donor wants to receive a thank-you letter, and sometimes, you don’t know who the donor is. The letter that’s included with the check from the DAF provided indicates the donor’s preference. If you’re outsourcing your data entry, make sure they’re aware of these processes.
Today, I’m making extra gifts to my clients and special organizations that kept me up to date on how my (monthly) gifts have been making a difference.
I sift through my stack of mail and choose those I’d like to give to.
This year, I’m trying something new and will send gifts from my DAF. I already make monthly gifts to 40+ organizations every year from my credit card or bank account, so those haven’t changed. Rather, these donations from my DAF provide an additional way to give and test how organizations follow up.
I think DAFs are here to stay and will continue to grow. Don’t miss the opportunity to let donors know that they can make monthly gifts that way, too! Happy “Hunting.”
Originally posted by NonProfitPRO Today on November 30, 2020.
