The Rundown - How Donor Advised Funds are Impacting Donor Behavior - May 26, 2023
New research indicates that those that have Donor Advised Funds give more and give longer
I recently stumbled upon a fascinating article that explores the relationship between donor-advised funds (DAFs) and the longevity of giving; you can find this article at the Non Profit Pro website here. The study highlighted in the article reveals some interesting findings about how donors tend to increase their granting as they hold DAFs for longer periods. Let's dive into the world of philanthropy and the potential of DAFs!
The Growing Influence of Donor-Advised Funds
Picture this: you have a desire to make a positive impact in society, but you're not quite sure where to start. You could make a direct donation by cash or check to your favorite charity, but you are looking for a more advanced tool. A tool that might grow more capital appreciation and also be a tool that could help you get into the discipline of giving to charity on a more consistent basis. Enter donor-advised funds, a unique tool that empowers individuals to contribute to charitable causes in a strategic and impactful way. Donor-advised funds essentially act as personal charitable savings accounts, allowing donors to make tax-deductible contributions and recommend grants to their favorite nonprofit organizations.
The Study Unveiled
According to the article, a recent study by Vangard Charitable shed light on the relationship between the length of time donors hold DAFs and the amount they contribute. The researchers examined a dataset spanning several years and found a significant positive correlation between the length of DAF ownership and the granting activity of donors. In other words, the longer individuals held DAFs, the more grants they made over time.
The article suggests that this trend could be attributed to several factors. First, DAFs provide donors with flexibility and convenience. Donors can contribute to their DAFs when it's most financially beneficial for them, even if they are not ready to decide on specific grantees immediately. This flexibility allows donors to take their time, research causes they care about, and develop a more strategic approach to giving.
Secondly, the study highlights the impact of donor engagement over time. As donors become more acquainted with the philanthropic landscape and learn about the organizations making a difference, they may be inspired to increase their giving. Developing a deeper understanding of the issues and witnessing the impact of their grants can fuel a sense of purpose and commitment, leading to a long-term increase in granting activity.
The Importance of Long-Term Philanthropy
The findings of this study have significant implications for the nonprofit sector. Charitable organizations often rely on consistent funding to carry out their missions effectively. Donors who commit to long-term philanthropy through DAFs provide stability and sustained support, enabling nonprofits to plan and execute initiatives with confidence.
Additionally, long-term philanthropy fosters stronger relationships between donors and nonprofits. As donors become more invested in the causes they support, they may seek opportunities to engage further, such as volunteering or serving on boards. This active involvement not only strengthens the impact of their giving but also creates a meaningful connection between donors and the organizations they support.
The Power of Education and Collaboration
The study's findings underscore the importance of education and collaboration between donors and the philanthropic community. Nonprofits and DAF providers can play a pivotal role in educating donors about the impact they can have by sustaining long-term giving. By sharing success stories, showcasing measurable outcomes, and facilitating connections with grantees, these entities can inspire donors to embrace their philanthropic journey.
Collaboration among donors is another aspect that should be encouraged. Donor networks, facilitated by DAF providers or community foundations, can create opportunities for donors to learn from one another, share experiences, and pool resources. By fostering a supportive community, donors can exchange ideas, explore new avenues of giving, and collectively make a greater impact.
The Weekly Notebook
A few notes and ideas of things I am seeing and hearing on the nonprofit world.
A Shameless Plug for Self-Promotion
A few weeks ago, I had the chance to sit on a zoom call to talk with David Schwab of Fundraise to put together an episode of his “Not Stop Nonprofit” Podcast. This was a wonderful opportunity to talk shop. You can hear the episode and learn more about the podcast here.
A Shameless Plug for Self-Promotion (Part Two)
I recently started a new substack that is focusing on my work here in my hometown of Troy, Ohio. As you may know, I recently ran for Mayor of my hometown and narrowly lost the primary election by 31 votes.
While it isn’t the outcome that I would have hoped for, there was a lot of positive energy that was ignited and is still burning bright. I started the Civic Capacity substack to steward that positive energy into productive conversations about our community.
Please check it out and let me know what you think! You can find it here:
Now Hiring!
I have a nonprofit in Sidney, Ohio that has reached out to me looking for a new Executive Director. I can tell you that this a very strong organization that needs leadership that has strong entrepreneurial and staff management skills. If you have any interest, please drop me a line at pinnaclestrategiesltd@gmail.com and let’s talk!
The Mosaic Conference was Amazing!
Yesterday was the annual Mosaic Conference of Community Leadership at Edison State Community College and put on by the Paul G. Duke Foundation. It was a great day of learning and reconnecting with nonprofit folks from all over this part of Ohio.
We were treated to a keynote address by John Carreon. John is the partner and CEO of Advancement Experts and is also on the faculty of The Fund Raising School at Indiana University. His talk about working towards transformational leadership from transactional leadership was solid.
How Can We Work Together?
Did you know that Pinnacle Strategies works individually with nonprofit and public sector leaders to help them solve problems, achieve goals and gain confidence in their roles?
Why?
Because, this work is hard and it’s often a lonely road. Our nonprofit and public sector leaders need people that they can talk to to get solid advice and encouragement to do the work that is in front of them. If you feel that this can be of value to you, or a member of your team, please reach out to pinnaclestrategiesltd@gmail.com and let’s talk.
Ready to Learn Something New?
One of the prettiest cities in the Midwest is Indianapolis and travelling there can open a perfect opportunity to sharpen your skills and meet new professionals in the field. I would encourage you to look at some of the offerings of The Fund Raising School at the Lilly School of Philanthropy at Indiana University’s campus in Indianapolis. The professional development school has great programming both on-line and in-person both in Indianapolis and at other sites across the country. Take a look at their course offerings here!
Online Learning Options from Texas A&M Announced
If travelling for professional development isn’t in the cards (or the budget), the Center for Nonprofits at Texas A&M University has some great offerings! I recently enrolled in one of their certificate programs and really enjoyed the online format and the online discussions that were developed. It was time and money well spent and I would highly recommend this program, especially for early or mid-career professionals. The next session begins in early February and you can learn more here!
Other Ways to Connect
Our coaching practice has openings and it has been a blast working with nonprofit leaders all across the country! If you are interested in working with me to get your nonprofit organization on a track to achieve the big missions you have, please reach out to me at pinnaclestrategiesltd@gmail.com.
Here are some other ways you can keep in contact with Pinnacle Strategies!
Check us out on our LinkedIn Page
Check us out on the Celebrating Leadership Facebook Page.
Want to help support this newsletter?
I hope you have found value in this newsletter. If you have found it valuable and want to help, the best thing you can do is “hit the heart”! By liking this post, you help other people interact with it. Also, sharing and commenting is very helpful as well. Thank you.