Report: Are Donor-Advised Funds Responsive to Nonprofits’ Economic Stress?
A new report from the Indiana University Lilly Family School of Philanthropy, presented by CCS Fundraising, explores how donor-advised fund (DAF) donors respond to nonprofit financial distress, both during major societal crises and quieter periods of economic strain.
The report, Do Donor-Advised Funds Respond to Nonprofit Financial Distress? Insights from the 2022 Economic Slowdown, analyzes DAF grantmaking from 2018 to 2023 to uncover patterns in donor behavior and the signals that influence giving decisions.
Nonprofits have faced increasing financial pressures in recent years, from global crises to local economic slowdowns. Meanwhile, DAFs now account for nearly 25% of all charitable giving in the United States. Understanding how DAFs respond in these moments is critical for organizations seeking to plan effectively and sustain their mission-driven work.
"DAFs play a central role in modern philanthropy, and understanding donor behavior is critical for nonprofit leaders," said Peter Hoskow, Principal & Managing Director at CCS Fundraising. "By examining key historic moments in giving, this report provides insights that help nonprofits anticipate donor responses and make informed decisions to strengthen their missions."
Among the key findings:
- DAF giving responds to major crises: During the COVID-19 pandemic, human service organizations saw DAF giving grew about 20% more than otherwise expected.
- Smaller-scale crises see more limited response: In the 2022 economic slowdown, DAF giving slightly increased to financially vulnerable nonprofits, though donor responses were influenced by visible cues rather than detailed financial analysis.
- Visible signs are key signals: DAF donors may rely on simple, observable indicators, such as organizational size, when deciding where to give. In 2022, nonprofits with less than $5 million in assets saw support from DAFs grow by 31% more than expected.
“Donor-advised fund creation has increased dramatically in recent years and many of these donors want to provide direct, immediate support in their local communities, especially during hard times,” said Amir Pasic, the Eugene R. Tempel Dean of the Lilly Family School of Philanthropy. “Better understanding the conditions and factors that influence their giving will help nonprofits raise awareness and funds to meet urgent needs.”
By understanding donor behavior patterns, organizations can better position themselves to maintain support during times of financial uncertainty. These findings highlight opportunities for fundraisers to engage DAF donors strategically, helping to ensure that funding reaches nonprofits most in need.
The preceding press release was provided by a company unaffiliated with NonProfit PRO. The views expressed within may not directly reflect the thoughts or opinions of the staff of NonProfit PRO.
