Our friends at the DAF Research Collaborative (DAFRC) have recently released another insightful report; Reinventing the Cycle: Adapting Relationship Fundraising for Donors Who Use DAFs.
As most readers know, DAFs are becoming more and more accessible to everyday donors because of the increase in sponsor organizations, the growth of workplace giving platforms, smaller initial contribution requirements and the increased public knowledge of its tax benefits. DAFs are more common at more varied giving levels than ever before.
In Reinventing the Cycle, authors Genevieve G. Shaker, Rachel M. Sumison and H. Daniel Heist interviewed nearly 50 fundraisers across the country, of varied experience, work sectors, gender and origin about their (and their offices’) experiences with DAFs. The researchers’ findings include lots of helpful observations about what has changed, what no longer works, and how fundraisers are finding new ways to reach their goals with DAF donors.
First Impressions
The overwhelming initial response from fundraisers was that DAF donors were still donors, in the traditional sense. “Even though DAF funds are managed by DAF sponsors, fundraisers noted that donor advisors should be treated like individual donors “as if they were writing the check themselves.”
While some fundraisers felt that sponsors acting as a third party could disrupt the fundraiser/donor relationship that historically comes from the relational process, most fundraisers acknowledged that they still have an opportunity to grow their relationships with DAF donors.
Challenges and Opportunities for Fundraisers
The report notes that the DAF giving structure made fundraisers reconsider their approach to donor interactions. While some felt that DAFs were another chapter in the giving story, some saw it as an opportunity to grow a relationship further.
Several of the interview subjects “used knowledge of a donor’s DAF as a tool for advancing the relationship.” The strategic information gained in these relationships helped fundraisers understand how their DAF donors gave. Further, what they learned about donor personalities and philanthropic patterns helped them in future asks (see the DAFRC’s “Tubs, Tanks and Towers” descriptors for more information).
Just as prospect research can uncover stock holdings or a large gift to a similar organization, these fundraisers saw evidence of a DAF as a wealth indicator and that gave them greater confidence in their solicitations. Fundraisers saw it “as a sign that the donor was philanthropically savvy, ready for more complex conversations, and that a relationship was especially worth building because of their philanthropic commitment.”
Others initially found (and experienced) that DAFs made their jobs more complicated, citing the anonymity, unclear IRS regulations and special processing required as reasons why.
The authors did note, however, that at the end, many fundraisers took on the responsibility of adapting to new structures within the relationship building process. Many proactively exchanged their organization’s EIN number with potential donors to streamline the process. Others integrated a DAF ask into their proposals, which helped fundraisers learn if the donor had a DAF, and if so, the name and sponsor, which further enriched the organization’s CRM.
Challenges and Opportunities for Managing “Anonymous” DAF Gifts
The anonymity in DAF giving was a concern to many of the respondents, although “nine times out of ten, the name of their DAF actually has their first and last name or at least their last name.”
Some fundraisers interviewed for the study discussed doing “detective work” to try to identify anonymous donors.
Surprisingly, others avoided research all together out of respect for donor privacy or the belief that it would not result in any new information.
The authors of the report, however, encourage readers to “be a detective,” instructing grant recipients to not “automatically assume that a grant was meant to be anonymous.”
Suggestions included looking at the original correspondence from the sponsor organization for hints, examining historical giving information, or contacting the sponsor as a last resort. Using DAFinitive®, can help you with this too!
Challenges and Opportunities for Data Entry and Donor Acknowledgement
Many respondents reported that their organizations had to adapt gift entry procedures to fit the changing nature of DAF giving. These changes included:
- Teaching data entry staff about what information to look for on DAF correspondence or checks.
- Streamlining the assignment of credits in their CRMs by assigning hard credit to DAF sponsors and soft credit to known advisors.
- Adding a field to donor records to designate that they give via a DAF account, which can be helpful for both for prospect research and reporting purposes.
- Instituting a specific “thank you” acknowledgement process for DAF gifts that doesn’t include tax language.
The report noted that interviewees found themselves in a “facilitator” role and acting as an intermediary between data entry staff, donors and DAF sponsors to make sure that information was added in an accurate and timely manner.
Conclusion
DAFRC is known for their reader-friendly yet deeply insightful reporting. Reinventing the Cycle: Adapting Relationship Fundraising for Donors Who Use DAFs is no exception. Based on the information in this report, DAF donors don’t have to be scary! Whether you are a fundraiser or a data entry professional, the report has a number of indices and illustrations to help your organization work more efficiently with DAF gifts, their sponsor organizations and most importantly, their donors.
*Image Credit: Universal Wheel, courtesy of the Smithsonian: https://collection.cooperhewitt.org/objects/18344161/
