Demystifying DAFs: Unlock $250 Billion from Donor Advised Funds

Erin Booker

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September 29, 2025

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3 minutes

Nonprofit Trends

How To Nonprofit

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If you've been hearing a lot about Donor-Advised Funds and you're wondering whether you need to know about them, we'll just ask you this: Are you interested in tapping into the fastest-growing donation channel in the United States? Does accessing $250 Billion sound intriguing? Ok, so we've got your attention. Now, it's your turn to ask the questions.

Funraise CEO and Co-founder Justin Wheeler and Chariot Head of Strategy and DAF Evangelist Mitch Stein sat down to an exhaustive (and exhausting!) list of questions that nonprofits just like you had about this fast-growing revenue channel.

During this webinar, get ready for anecdotes across the board from Mitch:

"...The International Rescue Committee was just on a webinar with me and they shared that DAFs have now made up 30% of their individual giving so far this year in 2025. I was speaking with the Smithsonian Museum, who told me that the first half of the year [2025] they raised as much from DAFs as they did the entire year in 2024."

Now that you've heard what Justin and Mitch had to say about DAFs, let's break it down.

DAF webinar summary

$250B (with a B)

Mitch:

"[In DAFs] there's $250B in assets—and that was as of the end of 2023. It's 5X the size since 2013, so the opportunity is huge. And digging a bit deeper into those industry-wide figures, look at the grant-making: in 2023, there was just shy of $55B granted to nonprofits out of these donor fund vehicles, and that figure is up 6x in the past 10 years. It's also really high turnover relative to things like private foundations which have a 5% payout requirement. A new milestone hit in 2023 was that more money was contributed to DAPs than private foundations."

Do donors actually distribute their DAF funds?

Mitch explains the myth of DAFs:

"There's this assumption or presumption that a DAF is this hoarding tool. First and foremost, these funds are irrevocable. ... there's no takesies-backsies. Yeah, you're getting the tax benefit, but it's only a benefit if you want to give or plan to give. Otherwise, you're just putting money away somewhere that you can't access."

And why DAF giving is like having a gift card:

"I think another conceptual thing for people to appreciate is when assets are being committed to giving in a restricted way ...it makes it a lot easier mentally, psychologically to then dole that money out... once you've made that commitment, you've taken what I would describe as like the mental friction of donations out of the equation ... you then get a solicitation, a friend's raising money, you and I are like, 'Oh, I've got this money here.' It's like going into a store and realizing you have a gift card... there's a very similar dynamic with DAFs where it kind of trains the person to be faster and more generous with their giving."

Growth and resiliency of DAFs

"...following a theory that was established during the financial crisis that was analyzed by some academics to examine what happened with DAF giving in 2009. When compared with any other form of giving, even private foundations, DAFs were the only channel of giving in 2009 to increase. And I think it underscores this point of if you're disconnected from the money in a positive way... you don't care as much as your own personal finances because you're already disconnected from it. So even during dips in the market, you're still likely to use those funds and respond aggressively to need, because economic downturn closely correlates to need for services and the things that nonprofits are doing."

How did this donation stream get so large?

The short answer: DAF trends are a perfect storm—and they're still in their early stages of growth. A longer answer: DAFs are experiencing explosive growth, with Fidelity and Schwab reporting 25–34% year-over-year increases in grantmaking. This surge is fueled by lowered entry barriers ($0 to open, $50 grants), better technology, and innovative tools like DAFpay. Tax-efficient giving of appreciated assets further drives adoption, while employers and financial advisers are introducing DAFs as benefits and client strategies. With less than 10% of advisers currently promoting DAFs, the market is still in its early stages, signaling massive future growth.

Mitch says it best: "It's like those tides are all driving this increase in DAFs."

DAF Mythbusting

If you know DAFs, well, first, you're part of a small-but-growing club, and second, you know there are a lot of unknowns in the general knowledge of DAFs. Mitch and Justin break through the whispers and lay down the facts and what they mean for the future of philanthropy.

Fact:

There are currently around 2 million DAF accounts, representing less than 1% penetration among Fidelity and Schwab clients.

Future Fact:

Looking ahead, DAFs could become as common as 401(k)s for anyone making at least one annual donation. Despite their rapid growth, awareness remains low—even among wealthy, charitable donors—indicating we’re still at the very beginning of widespread adoption.

Mitch: "I just can't even tell you how many times I've been in a conversation with someone where I'm like, 'I know you give a lot of money to charity' and they have no idea what a DAF is. It's like huge growth and also like so much opportunity still on the table."

Fact:

Rather than hoarding their DAF funds, research from Chariot's DAF Fundraising Report shows donors who switch to DAFs increase giving nearly 10x on average and double it at the median.

Mitch: "...the most exciting thing to me was being able to see what happens to a donor when in 2023 they donated with a credit card, but in 2024 the same person to the same organization used their DAF for the first time and the average increase in their giving between 2023 and 2024 was almost 10x."

Turn that fact on its head:

Mitch: "...the nonprofit role in all this in talking about DAFs first and foremost is to get people that have a DAF to use it to give to you. Because the other way to look at that ...means most of those people didn't use their DAF the first time they donated. ...if their average gift increase was 10x, how much money are we missing out on from people not using their DAF when they support us?"

The magic behind great fundraising technology

The secret to getting great results from any fundraising technology is... YOU.

"Great tech is awesome, but it really works best if you are informing all of your team about [DAFs]. Take the the opportunity of [DAFpay] now being available and share resources with your team. Can you lead a discussion internally? Can you check with your gift processors about how they're handling DAF gifts? Just do a bit of an audit."

DAF awareness is growing

As Mitch says, DAFs are still at the beginning of their potential:

"Awareness is growing, but DAFs in general... it's like the tip of the iceberg. We are just so early on in this trend and there's so much more just waiting out there. I heard one stat from a DAF provider that fewer than 10% of financial advisers currently offer DAFs to their clients... I think you can probably educate financial advisors in your own network about the power of DAFs... especially for them, it's a personal subject to bond with their client over, engage the next generation of their family. Philanthropy is such a more genuine and deeper way to engage with a client than just talking about their finances and investments. So, that's where I've seen advisers be the most successful with this tool, which ultimately then results in their clients being much more engaged philanthropically."

Nonprofit questions about DAFs and nonprofits

How much does DAFpay charge?

There is no cost to activate DAFpay with Funraise. Transaction fees are only incurred when a DAFpay transaction is created on your Giving Form. Similar to other payment types there are two fees: platform fees and processing fees. As of this writing in 2025, platform fees are standard and always 2%, while Processing fees are generally 2.9%, but can be lower with a paid Chariot plan.

Can you pull money out of a donor-advised fund?

No, once money is put into a donor advised fund, it's committed; you cannot take it back. This is because donors get a tax advantage for pre-committing to donate to a charitable organization. It's just like making a philanthropic gift to a nonprofit—that money is no longer the donor's.

Is DAFpay legit?

Totally legit; in fact DAFpay is too legit to quit. For nonprofits looking to expand their donor base or expand the capacity of their donors' giving, Funraise's already-high-converting donation form is an awesome option. For donors looking for the simplest way to make a DAF gift, DAFpay's 3-click process is the bomb.

Is DAF giving seasonal? When should we focus on DAF fundraising?

DAF giving behaves like individual giving with strong year-end spikes. Highlighting it during events, campaigns, and Giving Days—especially with DAFpay—maximizes impact. DAF Day (Oct 9) is a key moment, and DAFs can smooth out seasonal dips since funds are pre-committed.

How does DAFpay work? Why is DAFpay different than receiving a DAF check?

DAF Pay allows donors to initiate gifts online in just 3 clicks, giving nonprofits valuable donor visibility and stewardship opportunities, though payout methods vary across providers. Payout methods vary, but nonprofits should sign up for digital options to reduce risk and ensure that they get donor data along with the gift.

Wouldn't it be better to just meet with a potential DAF donor?

The most effective way to reach DAF donors is by starting with your current donor base, since many already give by credit card when DAF wasn’t available. With DAF Pay, nonprofits can capture those gifts seamlessly. The key strategy is visibility—clearly presenting DAF as a giving option on forms and websites—combined with simple, intuitive execution. By reminding donors and making DAF giving easy, nonprofits can increase conversion rates and secure larger contributions.

Will the DAF approve the donor's gift?

Technically, the money no longer belongs to the donor; it is the DAF's to do with what they want. It's natural to wonder whether the DAF will move the money since the gift is a suggestion from the original donor. While DAF funds legally belong to the sponsoring institution (e.g., Fidelity), gifts are almost always approved if the nonprofit is IRS-compliant and the purpose is charitable. The chance of rejection is extremely rare—similar to occasional declines with other payment methods—and Funraise runs eligibility checks to ensure smooth processing.

Can you use DAFs for recurring giving?

The short answer is... it depends. But the sky's the limit for nonprofits and DAFs! This donation stream may not be new, but it's growing rapidly, so it's the perfect opportunity to nonprofits to try new strategies, experiment, and ask questions!

Mitch expands: "Every DAF is different. There are different capabilities for each. There's 1,200 different DAP providers, but the vast majority of them have the ability to set up recurring gifts in those portals. The challenge is knowing when those gifts arrive, because they don't arrive on the same cadence. It's not like when you get a credit card gift as part of a recurring donations."

How does DAFpay provide more donor data than the DAFs themselves?

Easy, the donors themselves have provided the info during the giving process. A DAF tool on your website provides convenience, captures more gifts, and delivers immediate donor visibility. It allows donors to give quickly, appear on campaign walls, and use DAFs seamlessly, while nonprofits benefit from instant access to donor details for stronger stewardship. Prominently featuring DAF options also signals that your organization is modern and DAF-ready, broadening donor awareness and trust.

How do nonprofits educate donors about DAFpay?

Fundraisers should avoid giving financial advice on DAFs, instead encouraging donors to consult professionals. Their role is to share stories, highlight benefits like simplified giving, and emphasize that DAFs are accessible to all donors, not just the wealthy. By sharing personal experiences, fundraisers can authentically connect with donors and build stronger relationships.

Should we send receipts to DAF donors?

Nope! Do not send a receipt to your DAF donors, if you have their donor data. You can—and should—send a thank you in whatever format your nonprofit likes, using whatever contact information the donor provided. Also, do not send a receipt (or a thank you) to the DAF itself. They will not open it or respond.

How can nonprofits inform current DAF donors about DAFpay?

To inform offline donors about DApay, nonprofits should showcase it prominently on donation forms and websites, while also highlighting the feature in newsletters and campaigns—especially around DAF Day. Although many appear “offline,” these donors are already using digital DAF portals, so adding QR codes and online options simply streamlines their giving in a branded environment. This shift not only raises awareness but also strengthens stewardship and donor relationships.

Should nonprofits focus stewarding efforts toward DAF institutions?

Nonprofits should focus on cultivating relationships with individual DAF donors rather than chasing large institutions like Schwab or Fidelity, as these organizations rarely recommend nonprofits. The exception lies with community foundations, where open grantmaking can raise visibility and connect nonprofits to local donors seeking guidance. For most organizations, especially smaller ones, targeting big DAF sponsors offers little return compared to focusing on individual donor engagement.

How can we make DAF giving easy for donors?

Even though donors with DAFs know they can give, distractions and friction often prevent them from using their funds, leading many to default to credit cards. By clearly promoting DAF giving, nonprofits reduce barriers and remind donors of this option. Speaking directly to DAF holders shows that the organization understands their giving style, making donors feel seen and valued. The key is simple: remind them and make it easy to increase DAF contributions.

Are there any DAF limitations? Would local community foundations be accessible through DAFPay?

DAFpay is designed to work with all 1,100+ U.S.-based Donor Advised Funds (DAFs). These providers are listed and searchable within the DAFpay platform to make the giving experience simple for donors.

Are there safeguards in place so folks cannot purchase tickets through DAFs?

Some Funraise Giving Form features—including Tickets—are not available with DAFpay transactions.

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With DAF Day coming up on October 9, 2025, Funraise isn't just about making things easy on your donors. You should be able to focus on making impact, not figuring out how to explain DAFs. Here are all the communication templates you'll need for DAF Day—or any day! Plus, a DAF FAQ that you can include in your emails, drop onto your nonprofit's website, or write on your arm so you have all the DAF answers at your fingertips.

DAF Day donor communication templates

One day, one email, one social media post. Turn on DAFpay in your Funraise account and let your donors know that your nonprofit is poised to provide them with the simplest DAF giving experience around.

DAF Day email to donors

Subject: Make your DAF gift in 3 clicks on DAF Day!

October 9, 2025 is DAF Day—a day to fuel nonprofit missions like ours through gifts from donor-advised funds.

If you have a DAF, making a donation to [nonprofit] just got easier; you can now give directly from your DAF to [nonprofit] right on our website. No extra steps, just 3 clicks to make an impact.

Your generosity on DAF Day can help us [what your nonprofit does]. Make your DAF Day gift now. [link]

Thank you for being part of this movement and using your DAF to create lasting change.

With gratitude,

[Your name]

DAF Day social media post

🎉 October 9, 2025 is DAF Day! 🎉

Now you can make a gift from your Donor-Advised Fund (DAF) to [nonprofit] in just 3 clicks—right on our website. No portals, just impact.

Celebrate #DAFDay with us and put your DAF to work for good. 💙

[Donation page link]

#DAFDay #DAFgiving #DAFpay

General DAF communication templates

Is DAF Day far in the rearview or way off on the horizon? Try sending a general DAF email to your donor base. You never know who has a DAF and wants to give—or who might open a DAF today!

General DAF email to donors

Subject: Donor-Advised Funds: A simple, powerful giving experience

If you don't already have a Donor-Advised Fund (DAF), now's the time to consider it. DAFs are one of the fastest-growing giving methods—for good reason:

Tax advantages: Contribute now, claim your deduction, and donate funds over time.
Simplicity: Manage all your giving from one account.
Accessibility: Today, you can open a DAF with as little as the change in your pocket.

And now, giving from your DAF to [nonprofit] is easier than ever: you can make a donation right on our website—in just 3 clicks.

Whether you already have a DAF or are ready to open one, your generosity helps us [what you do]. Support [nonprofit] with a DAF gift today. [link]

With gratitude,

[Your name]

General DAF social media post

Did you know donating through Donor-Advised Funds (DAF) is the fastest-growing way to make an impact?

Tax advantages
Simple, all-in-one giving
Open a DAF with as little as pocket change

And now, you can give from your DAF to [nonprofit] in just 3 clicks, right on our donation form.

Smart giving. Simple impact. 💙

[Donation page link]

#DAFgiving #DAFpay #FutureOfPhilanthropy

Donor-Advised Fund (DAF) Giving FAQ for Donors

Donor-Advised Funds (DAFs) are one of the fastest-growing ways to give—and now you can make a grant from your DAF to [nonprofit] in just seconds, right on our donation form. Here's everything you need to know:

What is a DAF and how does it work?

A Donor-Advised Fund (DAF) is a charitable investment account. You contribute money or assets to your DAF, receive an immediate tax deduction, and then gift funds from your DAF to nonprofits like [nonprofit] over time. The benefit is that you get a tax advantage now, and can decide how much to give and to whom later.

Can I donate to any nonprofit with my DAF?

Yes—generally, you can make a gift to any 501(c)(3) public charity in good standing with the IRS, including [nonprofit].

How do I give through DAFpay on your website?

It's simple! When you visit our donation page, choose DAFpay as your payment option. Select your DAF provider, log in securely, and complete your grant recommendation—usually in 3 clicks or less.

Is giving through a DAF anonymous?

That's up to you. DAFpay gives you the option to share your contact information with us. If you choose anonymity, we may not know who the gift is from unless you notify us directly. But we want to know so we can share how you've helped us [what your nonprofit does]!

How long does it take for a DAF gift to reach [nonprofit]?

DAFpay makes it faster than ever for nonprofits to access DAF funds: gifts are processed almost instantly through your provider. Traditionally, grants from DAFs can take several days to weeks (!) to arrive, but DAFpay streamlines the process for quicker impact.

Do I still get a tax receipt when I give through a DAF?

You receive your tax receipt at the time you contribute to your DAF, not when you make the gift to [nonprofit]. That means you won't receive a new tax receipt from us for your DAF gift, but we'll send you a thank-you acknowledgment to confirm your impact!

Can I use my DAF to buy event tickets or auction items?

No. Because contributions to your DAF are already tax-deductible, DAF funds cannot be used to cover anything where you receive goods, services, or benefits in return (like tickets, tables, or auction purchases).

Can I set up recurring gifts through my DAF?

In many cases—but not all. Some DAF providers allow you to set up recurring donations. You'll need to check with your DAF provider; we'd love to work together to set up your ongoing support of [nonprofit]!

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