The holiday season is crunch time for fundraisers. On average, charities raise a quarter of their budget in December — and fundraisers are the staff tasked with bringing home the bacon. 

Historically, charities almost always knew their donors, but times have changed. 

Donors are increasingly giving through Donor Advised Funds (DAFs) — and unlike direct donations, DAF holders are not legally required to provide charities with their contact details. 

This can make things tricky.

“I’ll be honest, DAFs are a real head-scratcher,” said Katherine Scott, president of Apra Canada, the association of Canadian prospect researchers, whose members sift through public data on existing and future donors to help bring in gifts. 

“With Donor Advised Funds, there’s very little we can find.”

Though finding DAF holder information can be more challenging, data suggests it’s increasingly worth the effort. 

A DAF is a charitable fund within a foundation. In establishing a DAF, a donor gets a tax receipt for the full value of their donation but retains the right to recommend grants over time to charities of their choosing.

In recent years, DAF assets have grown dramatically, creating larger pools of philanthropic wealth for fundraisers to target. 

At the end of 2021, Canada’s 75-odd DAF foundations collectively held $8.5 billion in charitable assets — up 57 per cent from three years prior, according to research from the Canadian Association of Gift Planners and consulting firm KCI. 

DAF grants also tend to be much larger than the average donation. In 2021, the average DAF held about $400,000 in assets and offered three grants per year at $10,000 apiece, according to the CAGP report. 

To help fundraisers snag DAF grants, Scott and five other experts provided their best advice. 

1. Assume DAF holders want to receive your annual report

Owing to their more opaque structure, many charities believe DAF holders don’t want to hear from them and wish to remain anonymous — but it’s not true, says Melissa Bank Stepno, managing director of DAFinitive, a new DAF research platform. 

“[It’s a] big myth that needs to be busted,” she said. 

Canadian DAF holders generally view anonymity as “unimportant” relative to other factors that prompted them to create their fund, and almost all say they are “very interested” in connecting with grantees, according to a survey of DAF holders conducted for the CAGP report. 

“Most donors come to set up a Donor Advised Fund with a foundation as a way to simplify their giving, not because they don’t want to be connected to a charity,” said Natasha Benn, Victoria Foundation’s philanthropic services manager.   

2. Start by stewarding your existing DAF donors. This may take some database work.

Cold calls to DAF foundations to drum up new gifts have their place, but experts say it’s most effective to begin your DAF fundraising by connecting with your existing donors who have DAFs to pull in more significant future donations. 

“Always look inside first. Your best prospects are already giving to you,” said Scott.  

Doing so may begin with some database work. 

First, identify any grants you’ve received from DAF foundations — a quick online search should clarify if a foundation offers DAFs — and, next, link those grants to specific DAF holders. 

When a new DAF grant is issued to a charity, most foundations provide information about the DAF holder — the donor’s name or contact information — which can be used to update your records. 

This sounds simple, but donor information can sometimes be dropped if the grant acknowledgement letter from the foundation is sent to your CEO, not your fundraising department — and if the DAF holder’s name isn’t linked to their existing donor record in your database, said Malcolm Burrows, head of the Aqueduct Foundation. 

In this typical case, some of your longtime donors may appear as though they’ve stopped giving to you when, in reality, they’re just now giving through a newly established DAF. 

3. Strengthen the relationship first with a thank you

Victoria Foundation’s 240-odd DAFs collectively grant about $2 million monthly, according to Benn. But in 2022, more than half of the recipient charities failed to send the DAF holder a thank you. 

Benn said it’s crucial for charities to send a quick note because it’s donors who are making grant recommendations from year to year, and thank-you letters can go a long way.  

For charities looking to increase the size of DAF gifts this holiday season, Calgary-based fundraising consultant Conor Tapp suggests sending a thank-you letter to existing DAF donors, reporting on the impact of their most recent gift.

If you know the donor’s name and contact information, include it in the letter and get in touch directly. If you don’t, include the name of the DAF in the letter and send it to foundation staff, who will likely pass it along to the donor. 

4. Is cold prospecting DAF holders worth it? Some say yes, but expect mixed results

An estimated 80 per cent of charities did not receive any DAF grants in 2021, according to the CAGP report. If your charity is one of them and looking to identify new DAF donors, Scott recommends building relationships with DAF foundation staff, many of whom offer advice to DAF holders and welcome meeting with new charities to develop their sector knowledge.

As a rule of thumb, fundraisers can expect to find more willingness to connect among community foundation staff than among staff at commercially affiliated DAF foundations, like the Private Giving Foundation or Charitable Gift Funds Canada Foundation, Tapp said.  

As for how to best connect? 

Scott suggests meeting staff through sector events like those hosted by the CAGP or your local community foundation. You can also follow up on any new DAF grants with an introductory email to foundation staff, explaining your charity’s work and your keenness to chat, said Tapp.

5. Build relationships with financial advisors through existing volunteer networks

Another avenue for getting in front of DAF holders is through their financial advisors. 

Though all DAF foundations are independent registered charities, many are affiliated with banks or private wealth management firms. 

For instance, many financial advisors at the Royal Bank of Canada, Bank of Montreal and National Bank help donors establish DAFs with Charitable Gift Funds Canada Foundation, a foundation with $1.3 billion in assets in 2022. 

After establishing the DAF, these advisors sometimes play a light-touch charitable advisory role long-term. 

While not every fundraiser has connections to these professionals, Tapp says most charities do through their board of directors, whose volunteers often know financial advisors or people who employ advisors. 

He suggests fundraisers ask volunteers to identify financial advisors in their network and make a quick introduction. 

6. When connecting with DAF advisors, be careful how you frame it

After you’ve connected with a donor advisor, Tapp recommends focusing on how your charity’s work can help their donors achieve their philanthropic goals — not how the donor can help your charity. 

“When we call, quite often what people hear is that we’re speaking to our motivation — we’re a fundraiser out there, and we have a financial target,” he said. 

Instead, he suggests emphasizing the work your charity does best in the community and how it can help donors reach their impact objectives. 

Experts also encourage fundraisers to steer clear of asking donor advisors for additional information about DAF holders, such as their contact information or previous granting history. DAF foundation staff are cautious not to share any donor information that’s not publicly available, making this a dead end. 

7. It may be easier than you think to find information on DAF prospects

But just because DAF advisors won’t tell you much about their donors doesn’t mean you need to be in the dark, according to experts. 

If you know the name of a DAF holder, you can use existing prospect research platforms, like DonorPerfect’s DonorSearch, to find information about their giving history, assets and more. 

For information on new prospective donors, some DAF foundations publish DAF holder information in their annual reports or other documentation. There’s also a unique platform to make this sleuthing easier. 

Last year, prominent prospect research firm The Helen Brown Group launched DAFinitive, which currently lists more than 75,000 DAFs — about 8,000 in Canada — including previous granting history, sub-sectors of interest and contact information, where available. (All data is gathered by hand — not scraped by bots — and is based on publicly accessible information, Bank Stepno said.) 

Tapp also suggested fundraisers can narrow down the list of DAF foundations they target by analyzing grant data using a tool like CharityData.ca or Grant Connect. Doing so will allow you to see the amount of money flowing from DAF foundations to charities within your sub-sector — and, in some cases, the size of the grants, too. 

8. As you get more DAF grants, you may need to update your gift acceptance policy

DAF grants without a donor’s name make it difficult for charities to screen the funds against their gift acceptance policies, which often prohibit taking money from companies that sell tobacco, alcohol, weapons or pornography. (While individuals more commonly hold DAFs, companies use them, too.)

To minimize the potential reputational repercussions of taking dollars from a misaligned group, Scott suggests updating your gift acceptance policy to place conditions on anonymous gifts above a certain threshold — say, $10,000 or $25,000.   

For any gift beyond your limit, she suggests asking a DAF foundation staff member to attest that the donation isn’t contravening your charity’s policy. 

“My outlook is assume the worst will happen and prepare for it,” she said. 

9. Good news: Some of your existing fundraising activities are already reaching DAF holders

If you’re overwhelmed by this list, don’t stress too much: While experts say these tweaks can help you bring in new DAF donations, they also say your mailed solicitations, holiday fundraising events and social media posts are all already reaching DAF holders. 

“My advice is fundraising doesn’t change with DAFs,” said John Bromley, head of Charitable Impact Foundation. “The wallet changes. Where they’re pulling the money from changes, but nothing else changes.” 

Scott agrees. With DAFs, all of the same fundraising best practices still apply — things like thanking donors and reporting back on the impact of their gift. 

“If you do that, you’ll be fine.”  

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