DAF Training for Fundraisers

Module 1

What a DAF Is, and What It Is Not

One account, three parties, and the word that changes every conversation.

A donor-advised fund is a charitable account held by a public charity called a sponsoring organization. The donor contributes cash, securities or other assets, takes the tax deduction in the year of the contribution, and from then on recommends grants from the account to the charities of their choice. According to National Philanthropic Trust's annual DAF Report, these accounts hold more than $250 billion in charitable assets.

The Operative Word Is "Advised"

The moment assets enter a DAF, ownership passes to the sponsor for good. What the donor retains is a single privilege: to advise, meaning to recommend where grants go. The sponsor reviews each recommendation and approves it. For a legitimate charity, approval is almost routine, but legally the decision is the sponsor's, and so is the gift.

That single fact explains almost every rule in Module 3. If you remember nothing else, remember this: the donor advises, the sponsor gives. For the full picture, read What Is a Donor-Advised Fund?

Three Parties to Every Grant

The five steps from contribution to grant are laid out in How a Donor-Advised Fund Works.

Who Sponsors DAFs

Sponsors fall into a few families: national sponsors affiliated with financial firms, such as Fidelity Charitable, Schwab Charitable, Vanguard Charitable and Raymond James Charitable; community foundations; faith-based sponsors; and single-issue or advisor-managed programs. Module 4 shows why the differences matter. For the full directory, see Top DAF Sponsors and Providers.

What a DAF Is Not

• Not a private foundation. No mandatory 5% payout, no excise tax on investment income, no board, no staff and far less paperwork.
• Not the donor's money. The donor cannot take it back, pay personal bills with it, or buy anything for themselves with it.
• Not automatic. Grants move only when the donor recommends one. An account can sit untouched for years.

Before the Sponsor Says Yes

Before approving a grant, the sponsor confirms that your organization is an eligible charity in good standing with the IRS. It pays to see what they see. Look up your own organization on the Philanthropy.org 990 Lookup and make sure your legal name, EIN and status are current and correct.

Module 2

Why Donors Choose DAFs

Know why the account exists, and your ask gets sharper.

Donors do not open DAFs to avoid giving. They open them to give on their own terms. Understanding those terms is the difference between an ask that lands and one that misses. Every feature cuts both ways, as Pros and Cons explains, but these are the reasons donors say yes to the account.

Five Reasons Behind Every DAF

1. Appreciated Assets. A donor who gives long-held appreciated stock deducts its fair market value and never pays capital gains tax on the growth. Giving shares to twelve charities one at a time is a paperwork chore. Giving them once to a DAF, then granting cash to all twelve, is easy. This is the single biggest driver of DAF growth.

2. Bunching. With a high standard deduction, many donors only benefit from itemizing in years when they give a lot. So they put two or three years of giving into a DAF in one year, itemize that year, and take the standard deduction in the others, while their favorite charities still receive grants every year.

3. Timing. A business sale, a large bonus or a strong year in the market creates a big tax bill now. The DAF lets the donor take the deduction now and choose the charities later.

4. Simplicity and Privacy. One account, one set of records, one receipt per contribution. Grants can go out anonymously when the donor prefers not to be identified, which for some donors means fewer solicitations.

5. Legacy. Most sponsors let a donor name successor advisors, often their children, or name charities to receive the balance at death. The DAF becomes a family giving tradition, or a planned gift. Module 7 covers this.

The 2025 Tax Law Changed the Math

The tax law enacted in July 2025 made changes that take effect in 2026. Itemizers can deduct charitable gifts only to the extent they exceed 0.5% of adjusted gross income, and donors in the top bracket see the value of their deductions capped. Non-itemizers gain a new deduction for cash gifts, up to $1,000 for individuals and $2,000 for married couples, but gifts to DAFs do not qualify.

The net effect: bunching through a DAF matters even more for itemizers, and your smaller donors now have a tax reason to give to you directly. Donors and their advisors know this. You should too, and donors should confirm the details with their own tax advisors.

What This Means for You

• The money is already committed to charity. It will go somewhere. The only question is whether it comes to you.
• DAF donors are loyal once they start. A second grant from an existing account takes the donor about two minutes.
• The tax break is behind them. The only open question is which cause earns the money, so make the case for results, not deductions.

Module 3

The Rules Behind Every DAF Grant

Benefits, pledges and receipts. Get these right and you avoid nearly all DAF trouble.

Every rule in this module flows from Module 1: the sponsor made the gift, and the deduction was spent the day the fund was created. Hold onto that and the rules make sense on their own.

Rule 1: No Benefits to the Donor

Federal tax law imposes penalties when a DAF grant gives the donor, or the donor's family, more than an incidental benefit. The tax falls on the donor who recommended the grant and on any sponsor manager who knowingly approved it. Your organization is not the one taxed, but you are the one who created the problem, and the donor will remember that.

In practice: no gala tickets, dinner seats, golf rounds, auction credits or membership benefits paid for with a DAF grant. Recognition with no real value, such as a listing in your annual report or a name on a donor wall, is generally fine.

Rule 2: No Splitting the Ticket

A donor wants to buy a $500 gala ticket that includes $150 of dinner and pay the whole thing from a DAF. It cannot be done, and the IRS has signaled that the donor cannot fix it by paying the $150 personally and running the rest through the fund. The clean answer: the donor pays for the ticket personally, then makes any additional gift through the DAF with no strings attached.

Rule 3: Pledges Need Care, Not Panic

In IRS Notice 2017-73, the IRS said it intends to allow a DAF grant to a charity even when the donor has a personal pledge, as long as the grant makes no reference to the pledge and no other benefit flows to the donor. Final rules on this point have not been issued, so the notice remains the working guidance. Many sponsors follow it. Some do not. So:

• Check the sponsor's policy and your own gift acceptance policy before applying a DAF grant to a pledge.
• Never ask the donor to mention the pledge in the grant recommendation.
• For donors you know give through a DAF, use a non-binding statement of intent instead of a legally binding pledge. It is simpler for everyone.

Rule 4: Record the Sponsor, Thank the Donor

Record the grant with the sponsoring organization as the legal donor, because it made the gift. The sponsor does not need a tax receipt, since it takes no deduction, but some sponsors ask for a confirmation that the grant arrived. Send whatever the sponsor requests, and nothing more. Your thank-you goes to the donor, by name, unless they asked to remain anonymous. That thank-you must not suggest the grant is tax-deductible to them. It is not; they deducted it when they funded the account. Say instead that the gift came through their donor-advised fund, and describe what it will accomplish.

Rule 5: Anonymous Means Anonymous

Some grants arrive with only the sponsor's name. Respect that. Do not call the sponsor to find out who recommended it, and do not guess in print. Some sponsors let the donor share their name but not the amount, or the reverse. Honor exactly what the grant letter says.

What About Payout?

DAFs have no required annual distribution. Critics argue the money sits too long. Defenders point out that, in aggregate, DAFs grant out a much higher share of their assets each year than the 5% private foundations must distribute. Many sponsors also have their own inactivity policies. For fundraisers, the practical point is simple: money in a DAF is money waiting for a good reason to move. Be that reason. The full argument is in Ethical and Policy Debates Around DAFs.

Module 4

Finding the DAF Donors You Already Have

The grants have already arrived. What is missing is the process to catch them.

Most organizations already have DAF donors. They filed the gifts under a financial firm's name and never looked again. Start with your own records.

Clues in Your Gift Records

• A gift in the name of a sponsor, such as a community foundation or a national charitable fund, with an individual named in the grant letter.
• Grants that arrive on the donor's calendar rather than yours, often in the same month every year.
• Even-dollar amounts with no appeal code attached.
• A donor with obvious capacity whose personal gifts look small. The checks you see may be only the part of their giving that never passed through a fund.

Record It Right: Hard Credit and Soft Credit

Give the hard credit, the legal credit, to the sponsoring organization. Give soft credit to the individual who recommended the grant, and add a field for the donor's DAF sponsor on that person's record. Skip this and your reports show a large gift from a financial firm and nothing from the person who actually chose you. Clean coding is the foundation for everything else in this course. The full process is in How to Identify DAF Donors in Your Database.

Clues in What Donors Say

• "I'll put it through my fund."
• "My fund," "my account at Schwab," or the name of a community foundation.
• A recent business sale, retirement or other large liquidity event.
• Questions about giving stock, or a mention of the donor's financial advisor.

Not sure? Ask how they prefer to give: "Some of our donors give by check, some by stock, some through a donor-advised fund. What works best for you?" It is an easy question, and the answer shapes every conversation that follows.

Know the Sponsor

A grant from a national sponsor, a community foundation and a faith-based sponsor can look identical on paper, but the institutions behave differently. Some community foundations know their donors personally and invite local charities to present. Faith-based sponsors may limit grants to organizations that fit their mission. See DAF Sponsor Differences and Faith-Based DAFs.

An Insider Research Move: Schedule D

Every DAF sponsor files a Form 990, and Part I of Schedule D reports how many donor-advised funds it holds, their total value at year end, and how much went in and came out during the year. Look up your local community foundation on the Philanthropy.org 990 Lookup and you will know how large the DAF pool in your own backyard really is. New to reading the form? Start with our Form 990 resources.

Module 5

Asking for a DAF Grant

Less persuasion, more facilitation. Make it specific and make it easy.

A DAF donor has already decided to give. You are not persuading them to part with money; the money has already been parted with. You are helping them choose. That changes the ask from a pitch to a service. Scripts and framing are covered in depth in How to Solicit a DAF Gift.

Four Vocabulary Rules

• Ask for a recommendation. The donor recommends; the sponsor grants. Your words should match.
• Drop the tax language. Talk about the grant and what it will do, never a tax-deductible gift.
• Trade the pledge card for a letter of intent. Flexible for the donor, safe for you.
• Hand over the sponsor's checklist. Legal name, EIN and address, sent the same day.

Three Ways to Say It

Make It Easy Online

Many DAF grants start with a donor logging into the sponsor's portal and searching for you by name or EIN. If they can't find you in a few seconds, they move on to the next charity on their list. Every nonprofit needs, at minimum:

• Your legal name and EIN on the donation page, exactly as registered
• A mailing address for grant checks
• One line for DAF donors: "Giving through a donor-advised fund? We are listed as [Organization], EIN [XX-XXXXXXX]."
• A DAF giving widget, such as DAFpay or DAF Direct, that lets donors start a grant recommendation without leaving your site

See How to Add DAF Giving to Your Website, then check how your organization appears to donors on the 990 Lookup and claim your profile so the details are right.

Timing

• Year end, when donors review their accounts
• Right after a liquidity event, when the account has just been funded
• Spring and summer, when year-end noise is gone and your request stands out
• Any time you can show a specific result from their last grant

Don't Forget the Advisor

Behind many DAF donors stands a financial advisor who helped open the fund and may influence where it goes. Module 6 covers how to work with them.

Module 6

Working With Financial Advisors

The person who helped open the fund often shapes where it goes.

Many donor-advised funds are opened on a financial advisor's recommendation, and some are managed by the advisor directly. According to research published in our Resource Center, 72% of DAF donors work with a financial advisor, yet fewer than half rely on that advisor for charitable planning. The advisor is in the room. Almost nobody is talking to them about charity. That gap is where you come in.

Why Advisors Matter to DAF Grants

• They were there at the start. An advisor often suggests the DAF in the first place, usually to handle appreciated stock or a liquidity event.
• They may manage the money. Many sponsors offer advisor-managed programs, where the donor's own advisor invests the fund's assets. In some of those arrangements the advisor is paid on the assets that stay in the fund, so money that leaves as grants can reduce their fee. Most advisors put the client first, but the incentive is worth understanding.
• They shape the plan. Successor advisors, beneficiary designations and what happens to the fund someday are all conversations the advisor is part of.

How to Approach an Advisor

• Go through the donor, never around them. Ask: "Would it help if I sent your advisor some information about ways to support our work?"
• Speak their language. Advisors think in tax efficiency, appreciated assets, bunching and estate plans. Frame your organization as a resource for their client's goals, not a solicitation.
• Make their job easy. Send a one-page summary: your legal name, EIN, the gifts you accept, your gift acceptance policy for stock and complex assets, and one named contact who will answer quickly.
• Respect the relationship. The advisor works for the donor. Keep the advisor informed, never pressured.

Build an Advisor Network

The organizations that raise the most DAF money do not wait to meet advisors one donor at a time. They build relationships with the wealth advisors, estate planning attorneys and accountants in their community. Invite them to a short briefing on your work. Add them to your planned giving newsletter. Ask your board who advises them. An advisor who knows and trusts you will think of you when a client asks where to give. The full playbook is in Working with Financial Advisors on DAF Gifts.

Module 7

Stewardship, Repeat Grants and the Legacy Gift

The first grant is the beginning. The legacy gift is the goal.

The moment a DAF grant arrives is the moment most organizations get it wrong: a form letter, a receipt with the wrong language, then silence until next year's appeal. DAF donors deserve better, and they reward it. The full protocol is in How to Steward a DAF Donor.

Thank Within 48 Hours

Call or email the donor within two business days. Name the program. Say that the grant came through their donor-advised fund, so there is no tax receipt enclosed, and tell them what it will do. Months later, follow up with what it actually did.

Make the Second Grant Easy

A repeat grant takes a DAF donor about two minutes. Help them. Report results before their usual giving month. Many sponsors let donors schedule recurring grants, monthly, quarterly or annually, so invite the donor to consider one. A recurring DAF grant is as close to a sustaining gift as major giving gets.

The Legacy Gift Hiding in Plain Sight

When a DAF donor dies, the account does not disappear. Depending on the sponsor, the donor can:

• Name successor advisors, usually children or grandchildren, who continue recommending grants
• Name one or more charities to receive the remaining balance outright
• Leave instructions for a named fund that supports chosen charities for years

Few fundraisers ever ask about it. You should: "Have you thought about what happens to your fund someday? Many donors name the causes they care about most." A donor who names your organization as a beneficiary of their DAF has made a planned gift. Record it and steward it like one. See DAFs and Your Planned Giving Program.

Six Mistakes That Cost DAF Grants

• Sending the donor a receipt with tax-deductible language
• Crediting the sponsor and forgetting the person who chose you
• Offering event benefits paid for with the grant
• Hiding your EIN where no donor can find it
• Dropping a donor from cultivation because they skipped your year-end appeal. DAF donors give on their own calendar.
• Never asking who will receive the fund's balance

The complete list, ranked by frequency and cost, is in 10 Mistakes Nonprofits Make with DAF Donors.

Reference

Quick Reference: Rules, Questions and Terms

The whole course on one screen, for quick reference.

The Rules in Six Lines

1. The donor advises; the sponsor gives.
2. The deduction was taken at contribution. Never send the donor a tax receipt for a grant.
3. Record the sponsor as the legal donor and send any confirmation it requests. Thank the donor by name.
4. No goods, services or event benefits paid for with a DAF grant, and no splitting a ticket.
5. Pledges: check the sponsor's policy and your own. For DAF donors, prefer a letter of intent.
6. Publish your legal name, EIN and grant address where donors can find them in seconds.

Five Questions for Every DAF Donor

• Which sponsor holds your fund?
• Do you recommend grants on a set schedule, or as needs come up?
• Would you consider a recurring grant to us?
• Does your financial advisor help with your charitable planning?
• Have you named successor advisors, or charities, for the fund someday?

Glossary

Donor-Advised Fund (DAF)

A charitable account at a sponsoring organization. The donor contributes, takes the deduction, and recommends grants over time.

Sponsoring Organization

The public charity that owns and administers DAF accounts and makes grants on donors' recommendations.

Advisor

The person with advisory privileges over a DAF, usually the donor. Not the same as a financial advisor.

Grant Recommendation

The donor's request that the sponsor make a grant. The sponsor decides.

Successor Advisor

The person, often a family member, who takes over advisory privileges when the original advisor dies.

Incidental Benefit

A benefit too small to carry real value, such as a listing in an annual report. Anything more, paid for with a DAF grant, triggers penalties.

Bunching

Concentrating several years of giving into one tax year, often through a DAF, so that itemizing pays off.

Hard Credit and Soft Credit

Hard credit records the legal donor of a gift. Soft credit recognizes the person who recommended or influenced it.

Letter of Intent

A non-binding statement of a donor's giving plans, used in place of a pledge.

Schedule D, Part I

The section of a sponsor's Form 990 that reports the number, value, contributions and grants of its donor-advised funds.

Your Next Step

You have the fundamentals. Go deeper in the full Donor-Advised Funds Resource Center, and if planned giving is part of your job, join the Planned Giving Boot Camp.