Donor-Advised Funds: The Source Fundraisers Can't Afford to Ignore
There are still concerns with DAFs, however. For one thing, DAF donors can choose to be anonymous, meaning fundraisers may not be able to cultivate and build relationships with those donors.
“There’s tension sometimes between fundraisers and their wish to raise money and the charities that have DAF donors and their wish to protect donors,” Heisman says.
And while she admits that there is no easy solution to that, she has found that many DAF donors do not keep their information private.
Ken Berger, president and CEO of charity evaluator Charity Navigator — a nonprofit itself that utilizes and encourages charities to utilize DAFs — echoes those sentiments on anonymity and transparency:
“Traditionally, a very high-net-worth individual would create a foundation and be required to submit public reports so all the stakeholders can see what’s going on,” he says. “The danger with DAFs is if the same person goes that route instead, the transparency goes away — we don’t have as much information in the public square about what’s going on.”
Berger says best practices need to be put in place to provide as much transparency as possible, particularly in a sector that relies on good faith and trust.
“You have to be careful that we don’t fall into a trap where we go too far down the road to sacrifice transparency for the sake of convenience,” he adds.
The ‘rainy day’ concern?
One of the most common concerns from a fundraising perspective is that DAF donors would sit on their money in these accounts — money that would have otherwise gone directly to charity through other means — meaning less money in the sector.
“From what I’ve seen, those fears have not been realized. In fact, the opposite is true,” Berger says. “More money is being given out. Donors are not parking money there for 30 years.”