Child Sponsorship
Thinking about child sponsorship? Learn how these programs work, how funds are used, and what questions to ask before committing to a donation.
Wise Giving Wednesday: Donor-Advised Fund Considerations for Donors and Charities
As donor-advised funds grow in popularity, donors and charities are navigating new opportunities and challenges.
What Is a Donor-Advised Fund (DAF)?
Donor-advised funds (DAFs) have become an increasingly important part of the giving environment.
A DAF is a charitable account or fund maintained and operated by a 501(c)(3) sponsor organization. Individuals who contribute to a DAF account can receive a charitable tax deduction for their contribution. Once assets are contributed to the account, the sponsor organization has legal control over them, while donors can recommend how the money is invested and distributed to charities.
With very few exceptions, DAF sponsors will follow donor recommendations, making DAFs a growing consideration for donors seeking to manage their giving.
The Growth of Donor-Advised Funds
While DAFs have been around for decades, their use has grown substantially in recent years.
According to the DAF Research Collaborative’s Annual DAF Report 2025, during fiscal year 2024, there were 1,512 DAF sponsors in the U.S., including 103 national sponsors, 803 community foundations, and 606 single-issue charities. Together, these sponsors managed 3.59 million DAF accounts holding $327.87 billion in assets.
During fiscal year 2024 alone, donors contributed $90.57 billion to DAFs, and DAFs distributed $64.6 billion to charities.
Chariot’s 2026 DAF Fundraising Report, based on data from 54 participating nonprofits, found that median DAF revenue grew 75% between 2021 and 2025. At the same time, the report found that 50,000 existing donors who began giving through DAFs increased their giving by tenfold compared with their prior giving levels.
These findings come from a select group of participating organizations and cover a period of changing tax benefits, but they help illustrate why DAF giving has become an important fundraising channel.
Navigating DAF Challenges and Building Stronger Donor Relationships
As DAFs become a more important part of charitable giving, charities can make it easier for donors to give through them while also navigating some of the challenges DAF giving can present.
In 2020, the Center for Effective Philanthropy gathered perspectives from nonprofit CEOs and found that commonly cited disadvantages of DAFs included the difficulty of building personal relationships with donors, potential delays in receiving grants, and concerns about the transparency of some DAF sponsors.
At the same time, charities can take practical steps to strengthen DAF giving and relationships with DAF donors.
One effort to encourage DAF holders to recommend grants is DAF Day, a campaign led by Chariot in partnership with DAF providers and nonprofits. In 2026, DAF Day will take place on Thursday, October 8.
Mitch Stein, Head of Strategy at Chariot, notes that “Anyone that wants to increase their giving, or just give in a more intentional and streamlined way, can benefit from using a Donor-Advised Fund. There are several mainstream providers that have no minimums to open an account and have minimum grant sizes of $50 or less.”
For charities seeking more DAF support, Stein recommends regularly reminding donors that they can give through their DAF, making the process as easy as possible, and “stewarding DAF donors like the high value supporters they are.”
Fidelity Charitable, the largest donor-advised fund program in the United States, reports that its grant process defaults to providing donor information to charities.
It also recommends that charities make it easy for DAF donors to find the organization, recognize donors for their support, invite them into deeper engagement, and incorporate DAF giving into existing fundraising and marketing materials.
Similarly, DAFgiving360 recommends several ways charities can more effectively engage DAF donors, including increasing their visibility in DAF databases, including DAF giving options in promotional materials, asking whether planned gifts will be given through a DAF, and sharing information about effective giving strategies.
They note that “Donors who give through donor-advised funds are generally interested in giving effectively and achieving the maximum impact. Educational information on relevant topics like tax-smart charitable giving, setting charitable goals, and resources surrounding family philanthropy may enable donors to maximize their giving potential and include your organization in their giving plans.”
What Donors Should Consider When Giving Through a DAF
For those who have a DAF or are considering one, here are a few points to keep in mind:
Put Your Charitable Goals First
Whether you are a current or potential DAF donor, consider what you want your charitable giving to accomplish. What issues, communities, or causes matter most to you? What problems are you hoping to help address?
Even charities working in the same cause area can have different approaches, programs, and results. Keep in mind that you can still contact charities you are considering supporting directly to learn about their work, receive updates, or engage in other ways, even when your financial support is delivered through a DAF.
Make Sure Your DAF Dollars Reach the Causes You Care About
One of the most important questions for DAF donors is not how much money they can contribute but when and how that money can make a difference.
A DAF can give donors flexibility to make tax-deductible contributions when it is most convenient and allow contributed assets to be invested. DAF giving can also help donors think about how to create a giving budget or how to involve family in charitable plans.
At the same time, money that remains in a DAF has not yet reached the causes you care about. Take time to consider which causes and charities you want to support, and when.
Research Charities Before Recommending a Grant
DAF sponsoring organizations may make thousands of charities available for donors to select when recommending grants. A charity’s availability through a DAF sponsor does not necessarily mean that the charity has been evaluated or endorsed by that sponsor.
Before recommending a grant, visit Give.org to see whether the organization meets the BBB Standards for Charity Accountability. If a BBB charity report is not available, review the charity’s website for additional details about its services, needs, and achievements.
Double-Check the Charity Name Before You Give
Charities can have similar or almost identical names. Before recommending a grant, make sure you have selected the organization you intend to support. Check the charity’s legal name and, when available, its Employer Identification Number (EIN).
Understand How Your DAF Works
A DAF can offer a convenient way for individuals or families to organize and manage charitable giving. But a DAF is not the same as a personal investment account. Once a donor contributes assets, the sponsoring organization has legal control over those assets. According to the IRS’s guidance on donor-advised funds, DAFs are accounts owned and controlled by the sponsoring organization, while donors retain advisory privileges.
DAF policies can vary. Review the sponsor’s fees, investment options, minimum contributions, grant procedures, successor policies, and other terms before choosing the right provider. Donors may also want to consult a qualified financial or tax adviser about whether a DAF fits their circumstances and charitable goals.
Plan for Your Giving Legacy
A DAF can provide a structure for discussing philanthropic values with family. If this is an important objective for you, talk to your DAF sponsor about designating successor advisors or making other arrangements for the future. Involving children or other loved ones in decisions about DAF giving can help pass down a legacy of generosity and purpose.
A donor-advised fund can be a useful tool for organizing charitable giving, but establishing a DAF is only one step in the philanthropic process. Whether giving directly to a charity or through a DAF, thoughtful giving helps support your charitable goals.
Recent Reports
We are always working with charities to publish or update reports for donors. Visit Give.org to check out any charity before giving. Our recently evaluated charities include:
Finally, remember to let us know by going to give.org/charity-inquiry if you are interested in seeing a report on a charity not on the list and we will do our best to produce one.
