Ever get hit with a data point that makes you rethink everything you thought you knew about a topic? That was me when I opened the Annual DAF Report 2025. Let me explain:
For many years, I have eagerly awaited the annual release of the National Philanthropic Trust’s DAF Report. I considered it the preeminent source of information on donor advised funds (DAFs). Essentially, I viewed it as the equivalent of Giving USA’s annual report, but focused entirely on the DAF landscape.
When I learned that the DAF Research Collaborative (DAFRC) would be assuming responsibility for the report starting in 2025, it made sense. In parallel, Giving USA is also researched and written by an independent academic entity: Indiana University Lily Family School of Philanthropy.
When the Annual DAF Report 2025 was published (reporting on data from 2024), it did not disappoint. Importantly, it introduced several meaningful enhancements that the data nerd in me really appreciated, including:
- Additional sub-sector breakouts
- Access to more granular underlying data
- Clearer definitions and improved categorization
However, as I began digging into the details, I found myself pausing at several “wait a minute…” moments. For someone who has been tracking the data for many years and can rattle off historical statistics, the vast difference in findings between last year’s report and this year’s report was startling.
For instance, NPTs last report, the 2024 Donor-Advised Fund Report (published in late 2024 and reporting on 2023 data) indicated that there were 1,140 sponsoring organizations and roughly 1.7 million funds in the country, whereas the 2025 report published recently by DAFRC (and reporting on 2024 data) cites 1,485 sponsoring organizations and roughly 3.3 million funds. Those are some wildly big differences!
While I know the DAF market is growing, could the number of sponsors really have jumped 30% in just one year? And similarly, could the number of funds nearly doubled?
It took time, and conversations with colleagues in my network, to fully process what was happening in the data.
Then, I had my lightbulb moment.
First, the rigor of the DAFRC’s methodology essentially found, or identified, a number of sponsoring organizations that were not previously included in the report. These were not necessarily new-to-the-market sponsors. Some were simply missing from previous reports. By extension, those sponsors were managing accounts that had not been included in previous reports.
Second, this meant that while there was growth last year, as one would expect, it was far more modest than I initially thought. And, more importantly, almost all of the growth was within just one type of sponsor – a subtype that was introduced this year: the Donation Processor.
What is a Donation Processor?
As mentioned previously, one of the DAFRC’s enhancements this year is the introduction of sponsor category subtypes. Donation Processors are a sub-category of National Sponsors.
By the DAFRC’s definition, a National Sponsor is: “a 501(c)(3) tax-exempt nonprofit organization that administers DAFs. These organizations do not have a specific geographic or cause area focus.” Typically, we think of the Fidelity Charitable, DAFGiving360 (affiliated with Charles Schwab) and other similar charitable arms of large fiduciary firms as the primary type of sponsor in this category.
The Donation Processor subtype is defined as: “a 501(c)(3) tax-exempt nonprofit organization primarily focused on streamlining mass-scale or complex contributions and that also administers DAFs.” To give you an example of what this means, the three largest donation processors represented in data are:
- American Online Giving Foundation, who collaborates with Benevity, one of the largest workplace giving tech providers;
- Givinga Foundation, Inc., an organization that states that one of its primary goals is to make philanthropy more accessible using a B2B model, which includes employee giving programs and engaging consumers with corporate brand experiences; and
- PayPal Charitable Giving Fund, which helps facilitate giving via the PayPal platform and other ecommerce platforms.
According to this year’s report, there are 21.6% more DAFs at Donation Processors this year as compared to last year, whereas the growth at all the other sponsor types combined was only 6.9%. Additionally, DAFs managed by Donation Processors account for more than 85% of the DAFs in the US today.
The Key Shift: Clarity around Donation Processors
The addition of more Donation Processors —and, importantly, the clarity around who they are—significantly reshapes the interpretation of the DAF market.
From both a tax perspective and an academic research viewpoint, considering Donation Processors as DAF sponsors makes sense. These entities meet the legal criteria and are relevant for understanding the full universe of donor advised giving mechanisms.
But from a practical fundraising standpoint, especially for nonprofits trying to understand the breadth, depth, and behavior of the DAF market, there are crucial distinctions to keep in mind.
Consider what it means that the vast majority of DAF accounts held at Donation Processors are affiliated with workplace giving programs. In these cases, the DAF is part of a corporate giving program where the contributions originate from a company’s assets, not from an individual donor’s personal funds.
In practice, these arrangements resemble matching gift programs more than traditional DAFs. And importantly, if an employee leaves the company, their access to the funds disappears. While the employee may influence giving decisions, the assets are corporate, not individual.
The philanthropic behavior reflected by these donors differs meaningfully from what most nonprofits consider a “true” DAF relationship. And, this distinction has material implications for how we interpret growth trends.
The Scale of the Impact
Simply stated, the number of DAFs at Donation Processors is huge in number, and these DAFs are driving the growth in DAF market, yet they are small on financial impact.
Let’s look at the numbers:
- 1.29 million DAFs were created at Donation Processors in 2022 alone — and by 2024, that number had surged to 2.85 million.
- Meanwhile, “traditional” DAFs grew only modestly: from 664,747 to 710,634 between 2023 and 2024.
- Just 22 Donation Processors—only 1.5% of all sponsors—now account for more than 85% of all DAF accounts in the U.S.
- Yet those accounts generated only 5.87% of total DAF grantmaking.
- And they hold <1% of the total assets sitting in DAFs.
In other words, the majority of DAFs in the United States are being funded by corporate dollars, not individual donors’ assets. And, the boom in DAF accounts is being driven not by community foundations or traditional national sponsors but by workplace‑giving‑oriented programs.
Where I started thinking that the industry was far larger than I ever expected – and in some ways it still is – when I really focused on what the data was illuminating, I realized that there are actually far fewer “traditional” DAFs that I thought – just ~710K and not 1.7 million!
This in no way diminishes the importance of DAFs on the philanthropic landscape. Nuances aside, DAFs still pushed $64.89 million of funding into the nonprofit market in 2024 – according to Giving USA, that’s 15.1% of total giving and 22.8% of individual giving in the country.
But, it does help us better understand the landscape and makeup of the DAFs in existence.
It’s a reminder that topline soundbites are never enough. To truly understand industry trends, we have to dig into the methodology—what’s included, what’s missing, how those choices shape the story, and most importantly, what it means for our sector.
