The nonprofit guide to donor-advised funds and year-end giving

Kat Boogaard
Contributing Writer
Jun 4, 2026

Most nonprofits are used to seeing a surge of last-minute donations at the end of the year as their supporters rush to make a tax-deductible gift.

However, supporters with donor-advised funds (DAFs) don’t follow this same pattern. These contributors get a donor-advised fund tax deduction when they add money to their fund (and not when the money is actually distributed to a cause or charity).

So, the typical time pressure you inject into your nonprofit’s year-end campaigns will fall flat. But that doesn’t mean DAF donors don’t want to support your mission — they’re often incredibly generous and enthusiastic. You just need to adjust your approach to fit the way these donors give.

Let’s get a refresher on the basics of donor-advised funds and look at how your nonprofit can tweak your year-end playbook to better connect with these specific supporters.

What are donor-advised funds (and why do people use them)?

If you’re not already familiar with donor-advised funds (DAF), they’re essentially a charitable investment account. A donor puts money (or assets like stock) into the account and receives an immediate tax deduction when doing so.

Those funds can grow tax-free until the donor directs grants to the nonprofits and charities they want to support (you might hear these grants called “donor-advised fund distributions”).

DAFs aren’t managed by the donor directly — they’re held and administered by a sponsoring organization. Popular ones include Fidelity Charitable, Vanguard Charitable, and DAFgiving360, and many community foundations.

Who uses donor-advised funds?

Many financial advisors use DAFs as practical tools for clients looking to take advantage of tax benefits while also supporting causes they care about.

Donor-advised funds are often associated with high-net-worth individuals, with a paper from the National Bureau of Economic Research estimating the annual income of an average DAF donor at $1,361,651. Additionally, DAFs appeal to an older and more established crowd, with Baby Boomers representing 49% of all DAF advisors.

But generalities aside, DAFs are becoming more accessible to a broader variety of donors, including:

  • Individuals spanning a wide income range: DAFs are no longer reserved for the ultra-wealthy. Many DAFs have minimum initial contributions between $5,000 and $25,000, making them viable for a variety of income levels.
  • Families who want to build a giving legacy: Some families want to establish a tradition of giving and use DAFs to do so. Research from the Dorothy A. Johnson Center for Philanthropy found that 92% of DAFs have a succession plan in place.
  • Business owners who want to maximize the tax benefits: Business owners who experience large, one-time financial gains can make a sizable contribution to a DAF while spreading grant distributions over time.
  • People with appreciated assets: Donating stocks, real estate, or cryptocurrency through a DAF allows donors to avoid capital gains taxes while still making meaningful contributions.

Needless to say, DAFs appeal to a wide array of people — and the popularity of these funds persists. Data from the National Philanthropic Trust states that there were 1,782,281 individual DAF accounts in 2023 and that these funds granted $54.77 billion to nonprofits during that year.

Why do people use donor-advised funds?

So, what makes a DAF preferable to donating directly to a charity or nonprofit? There are plenty of practical reasons:

  • Tax advantages: Donors receive an immediate tax deduction when they contribute to a DAF, even if the money isn’t distributed to nonprofits until years later.
  • Strategic giving: Because the timing of the charitable contributions isn’t tied to a tax deduction, donors can make thoughtful and strategic donations.
  • Simplicity and flexibility: Unlike private foundations, DAFs offer minimal administrative hassles and lower setup costs.
  • Investment growth: The money in a DAF can be invested and potentially grow over time.
  • Privacy: Donors who want to remain anonymous can make DAF grants without revealing their identity.

Those benefits go a long way in explaining why DAFs remain one of the fastest growing vehicles for charitable giving.

How do nonprofits accept donor-advised fund (DAF) donations?

Nonprofits accept DAF donations in two main ways. The traditional route is the grant process: a donor logs into their DAF sponsor and recommends a grant to your organization using your legal name and EIN. The sponsor verifies your 501(c)(3) status, then sends the funds by check or ACH, typically with no fee to the nonprofit.

The faster, modern route is to embed a DAF-direct payment option like DAFpay into your donation checkout, allowing donors to initiate a grant in a few clicks.

5 practical tips to capture DAF donations at year-end

DAF donors aren’t like your typical last-minute year-end givers. Here are a few DAF giving strategies:

1. Create dedicated DAF landing pages

Adding a “give via DAF” option to your main checkout isn’t going to generate the results you want. Build a focused landing page that appeals specifically to DAF donors.

2. Launch your campaigns early

Start your DAF-focused campaigns in October or November, giving donors plenty of time.

3. Highlight your mission and impact over tax benefits

Focus your messaging on the difference their gifts make, rather than potential tax savings.

4. Refine your digital experience for DAF donors

Make the digital donation experience simple and clear for DAF donors.

5. Track, measure, and steward

Track your DAF volume and compare results year-over-year to learn what’s working.

Maximize DAF giving (without the year-end gimmicks)

Givers with donor-advised funds are a huge opportunity for your nonprofit. With adjustments to your campaigns — like dedicated landing pages, earlier outreach, and clear storytelling — you can tap into the generosity of DAF donors.

Commonly asked questions about accepting DAF donations

  • Can donors give to my nonprofit through a DAF directly on our website? Yes.
  • What information do donors need to recommend a DAF grant? Donors typically need your nonprofit's legal name and EIN.
  • Are there fees to accept DAF donations? Typically no fee, but DAF-direct tools do involve a processing fee.
  • How do nonprofits track and reconcile DAF donations? Track DAF volume separately and compare against expected gifts.