Many fundraisers are aware that, in light of the new tax law, donor advised funds (DAFs) should become a bigger part of a typical nonprofit fundraising operation.

What may not be as well known are the ways in which some individual financial firms go beyond just setting up accounts. The best ones assist and improve their client’s vision of philanthropy through DAFs. One such firm, Charles Schwab, walks clients through an interactive online guide during the DAF set up process:

Let’s walk through all three steps.

1. Consider Your Goals

Within this section you will see numerous thought-provoking questions to help anyone form their philanthropic giving gameplan.

A few of my favorites are:

  • Can you combine philanthropic support with volunteering?
  • Would you like to include your family in your philanthropic goals?
  • Would you like to extend your philanthropic efforts beyond your lifetime?

Just think of the key concepts the DAF has just introduced above.

In just a few brief questions they have introduced volunteering in the charity sector as well as creating a family game plan, which is good because the last concept is legacy giving that can impact the family.

Time after time I have seen individuals reasonably well-off financially slide into retirement with no game plan except to play golf, travel or watch television. Their lives soon become empty because years of truly fulfilling work has been replaced with boredom.

The concepts brought to life above can bring an extended life of fulfillment right into being.

Just consider this same individual as an active volunteer with a cause or two they deeply relate to. Perhaps they become a board or committee member and become even more involved. They then share this excitement with their family and work together to create a lasting legacy of impact.

Please keep in mind the majority of individuals achieving some portion of financial success have no idea that philanthropy can be more than giving to their church or children’s schools. The concept of strategic impact to one or more charity’s missions would never be considered.

2. Identify Your Charities

As noted above, most individual donors seldom support more than 2-3 charities on an annual basis. Even many wealthy individuals I know only give to charities that have reached out to them. These are the same individuals who shop carefully for the exact type of organic food desired.

In this case the DAF introduces the following key resources for charity related research:

  • Guidestar
  • Charity Navigator
  • Charity Watch
  • Give Well

Such proper research could lead to high level of interest and connectedness never known or achieved by most donors. Just think about the possible future impact!

3. Write Down a Mission Statement

Literally no nonprofit and few for-profit organizations would consider operating for even a single day without a mission statement. By prompting the owner of a DAF to move to this higher level of focus via a written mission statement the goals fostered above can come to life and perhaps even be improved over time.

This third step literally ties the previous two steps together and should be a guiding light in insuring the donor’s mission of philanthropic impact is realized.

So what’s the point?

The reason I am sharing this is two-fold:

1. You as a nonprofit can do this! Don’t wait for a financial institution to inspire an individual’s philanthropic gameplan. The Schwab example is just one of the donor advised funds reaching out to improve the world of philanthropy. As DAFs become a more popular financial vehicle, this approach will become the normal among financial institutions. You should be controlling this conversation.

2. You want to be top of mind when the donor gets to step 2! If you aren’t driving steps 1 and 3, you should at least position yourself as a chosen charity for step 2.

My hope is that more donors consider this form of enlightened and informed giving in the future. Every fundraising should consider introducing the three steps above to their donor population in some manner!

Donor Advised Funds

Jay Love

Jay Love

Co-Founder & Chief Relationship Officer at Bloomerang
A 30+ veteran of the nonprofit software industry, Jay Love co-founded Bloomerang in 2012. Prior to Bloomerang, he was the CEO and Co-Founder of eTapestry for 11 years, which at the time was the leading SaaS technology company serving the charity sector. Jay and his team grew the company to more than 10,000 nonprofit clients, charting a decade of record growth. Prior to starting eTapestry, Jay served 14 years as President and CEO of Master Software Corporation. MSC provided a widely used family of database products for the non-profit sector called Fund-Master. He currently serves on the board of the Center on Philanthropy at Indiana University and is the past AFP Ethics Committee Chairman. Jay is also the author of Stay Together: How to Encourage a Lifetime of Donor Loyalty.