Demystifying donor-advised funds: How to secure a DAF grant

You’ve heard that donor-advised funds (DAFs) are one of the fastest-growing giving vehicles in the United States. The donors behind them tend to give generously—and often. But what can your nonprofit actually do to secure those grants? It starts with making sure your nonprofit is findable, credible, and easy to give a DAF grant to.

In a recent webinar hosted by Candid, Erin Carson, grants manager at Vanguard Charitable, shared a six-step plan nonprofits can follow to tap into this revenue stream. Here are the highlights:

1. Start by updating your Candid profile

This is step one for a reason. Most major DAF platforms, including Vanguard Charitable, pull data directly from Candid to surface organizations in donor search results. If your Candid profile is outdated or incomplete, it may give donors pause—or lead them to abandon a DAF grant entirely.

Check these essentials in your profile now:

• Is your legal organization name current?
• Is your address accurate?
• Does your mission statement actually describe your work, or does it just say “mission statement”?
• Do you have a Candid Seal of Transparency?

Earning a Candid Seal of Transparency—by sharing your nonprofit’s mission, donation information, program information, financial reports or IRS filings, and/or leadership and board demographics—matters more than you might think. Vanguard Charitable found that organizations with a Platinum Seal received twice the amount in DAF grants on their site, compared with organizations without a Seal. Our data shows that nonprofits with any Seal receive 62% more on average in contributions overall, not just on DAFs.

Perform a simple self-audit: Open your profile and read it as a donor would. Ask yourself three questions: Is it current? Is it clear? And does it make me confident this grant will be used well? Then make one easy update, like adding your mission statement, and publish it.

2. Make it easy to give a DAF grant

Add a dedicated DAF page to your website. Include your legal name, EIN, mailing address, and electronic payment info. That’s it! Keep it simple and easy to read.

The EIN is especially important. Many nonprofits have similar names. Some share names with organizations in the same city. The EIN removes any doubt that a donor is giving to the right one.

Make sure the name on your website matches your Candid profile exactly. If you use a DBA name publicly, think about whether donors searching for you will find what they expect. Confusion causes donors to stop—and they don’t always come back.

If your organization has multiple locations or chapters, be explicit about where grants should go. And if you haven’t enrolled in electronic grant delivery, check with the DAF sponsors you receive grants from most and sign up if you can. Nobody wants to wait on a check.

3. Get creative with stewardship when donor information is limited

DAF grants don’t always come with donor contact information; some donors choose to remain anonymous. Focus on what you can control: Send prompt and informative gift acknowledgments to the donor when possible, share impact updates with the DAF sponsor when appropriate, and make sure your public materials clearly reflect your priorities and outcomes.

On the recordkeeping side: Hard credit the DAF sponsor as the legal donor, since they’re the entity issuing the DAF grant. Soft credit the recommending individual internally for stewardship purposes.

When you do have donor contact info, use it. Encourage recurring giving. Vanguard Charitable found that DAF donors who set up recurring grants give roughly 3.5 times more and increase their amounts about 8% year over year on average.

4. Think beyond the DAF grant to ensure long-term engagement

Beyond encouraging recurring gifts, how can you boost your nonprofit’s visibility to reach more DAF donors and secure sustainable support?

DAF donors can name nonprofits directly in their succession plans, either as a lump-sum beneficiary or through an endowed grant that pays out annually. Consider mentioning this on your DAF giving page. It’s a low-lift addition that opens the door to legacy conversations.

To cultivate relationships with community foundations and single-issue DAF sponsors, identify those aligned with your geography or mission area. Attend their events. Understand which organizations they tend to highlight. Getting on their radar takes effort, but it’s worth it.

Two things to remember

Keep your Candid profile complete and current. It’s the starting point for being found by DAF donors—not just a checkbox. Organizations that stand out go further: They’re specific about their programs, outcomes, and financials. The easier it is for a donor to understand your work and feel confident in your organization, the more likely they are to select you.

Make your website DAF grant-ready. Include your legal name, EIN, and giving instructions and pair that with clear messaging about DAF giving in your fundraising materials.

Photo credit: JLco – Julia Amaral/Getty Images