Let’s be honest—donor-advised funds (DAFs) make a lot of nonprofit professionals uneasy.
At the most basic level, of course we love the concept of donors having tools to support philanthropy. But many of my peers are uncomfortable with the distance that DAFs can create—whether that’s about the warehousing of charitable wealth, the sometimes-anonymous grants, the added layers between a donor and the organizations they care about, or some other critique.
That discomfort is real. But ignoring DAFs doesn’t fix it. It just ensures that those layers stay opaque and that someone else—not you and your organization—shapes how the donor thinks about giving.
DAFs aren’t a fringe tool anymore. They’re one of the fastest-growing giving vehicles in the U.S., holding more than $250 billion in charitable assets. Teachers, retirees, and entrepreneurs alike use them because they make giving easier. (Full disclosure: This author has a DAF!)
The question isn’t whether DAFs are “good” or “bad.” It’s whether nonprofits can stay relevant if they refuse to engage with how donors actually give.
Education Is Not Promotion
Educating donors about DAFs is about responding to the realities of a modernizing philanthropy. Nonprofits aren’t here to sell financial products, but we are here to make generosity informed, intentional, and connected.
When we explain what a DAF is, how to recommend a grant, or how to move non-cash assets into charitable use, we’re bridging the gap between donor and mission.
Because the truth is, DAFs solve real problems donors face. They can turn complex, non-cash assets—stock, real estate, crypto—into active philanthropy. They also give thoughtful donors the agency to think strategically about their giving rather than making rushed year-end decisions. And, they create capacity for donors who want to be generous but need flexibility in timing.
Without a DAF, many of those assets would never reach nonprofits at all. That’s not because donors don’t care, but unfortunately in donors’ busy lives, the mechanics of giving can be too complicated or the timing may not align. When we educate donors about the ways they can use new tools to facilitate their philanthropic goals, we help transform potential energy into impact.
And yes, transparency and payout rates deserve scrutiny—but the best way to influence that is by staying in the conversation, not opting out of it.
A Quick Reality Check
Disliking DAFs in 2025 is a lot like disliking online donation forms twenty years ago because they didn’t come with reply codes or full contact details for the database. Checks felt personal and traceable. Online gifts felt distant, depersonalized, and “less loyal.”
But the nonprofits that embraced online giving—and learned to build relationships in new ways—are the ones thriving now.
Just like online forms made giving easier for busy professionals, DAFs make it possible for donors to give in ways they literally couldn’t otherwise—whether that’s turning complex assets into grants, capturing giving at a liquidity moment, or having the breathing room to think strategically instead of scrambling.
Without DAFs, the alternative isn’t necessarily more checks. It could be no gift at all.
Refusing to talk about DAFs doesn’t protect your donor relationships. It just sets you up to lose a valuable one.
What DAF Education Actually Does
When you move beyond just saying “we accept DAF gifts” to actually educating donors, something shifts. Here’s what active DAF education accomplishes:
It meets donors where they actually are. Many donors have heard of DAFs but may not really understand them. When you explain what a DAF actually is—not just that you accept them—you make them feel accessible and not abstract tools for the ultra-wealthy. And when donors pursue that path because it genuinely makes sense for them, your organization is front of mind when they start directing funds.
It captures giving at the point of liquidity. Donors often fund DAFs during windfall moments—selling a business, stock compensation, inheritance, year-end bonuses. If you educate donors about DAFs before these moments happen, you’re positioning your organization to benefit when they’re making decisions about where to park charitable assets. Wait until after, and you’ve missed the opportunity.
It solves the “I want to give but not right now” problem. DAFs separate the tax benefit (now) from the granting decision (later). When donors understand this, you remove a significant barrier. They can make the gift today, get the deduction, and think through allocation when they’re ready—which often means larger initial contributions than they’d make outright.
It positions you as a partner, not just a recipient. You’re demonstrating that you care about donors making informed choices rather than endlessly pushing a transaction. This builds trust and positions the organization as a strategic partner in the donor’s giving journey—which is exactly how sophisticated donors want to be treated.
It changes giving behavior in your favor. Donors who understand DAFs tend to give more strategically and consistently. And because the money is already “set aside” for charity, it often leads to larger or more frequent gifts. You’re essentially creating a mental account where your organization can be a beneficiary.
It opens doors to deeper conversations. DAF education naturally leads into planned giving and legacy conversations. It’s a gateway to discussing values, long-term impact, and more sophisticated giving vehicles—without the awkwardness of jumping straight to “have you considered a bequest?”
It strengthens institutional relationships. Building resources around DAF education strengthens your connections with financial advisors and community foundations. These influencers appreciate nonprofits that understand the landscape and can speak intelligently about giving vehicles—and they’ll think of you when advising their clients.
It aligns with how modern donors actually want to give. DAFs offer flexibility, simplicity, and donor control. Educating donors about this option gives them that “aha, thanks for thinking of me” moment—you’re showing you understand their needs, not just your organization’s.
It’s especially critical given upcoming tax law changes. With new tax laws favoring gift bundling, DAFs become even more appealing as a tool to maintain giving in “off” years. Donors who understand this can sustain their support strategically rather than dropping off when they’re not itemizing.
And here’s what nonprofits often miss: most organizations just say “we accept DAF gifts.” The ones who actually educate—who walk donors through opening accounts, explain the benefits, demystify the process—are building relationships that compound over time.
How DAF Education Supports Different Donor Behaviors
Not all DAF holders behave the same way. Understanding how donors use their accounts—what philanthropy professionals call “tubs, tanks, and towers”—helps nonprofits move from frustration to strategy. This framework, popularized by nonprofit consultant Alan Cantor and reinforced through research from organizations like the National Philanthropic Trust and the Urban Institute, identifies three distinct patterns:
- Tubs give roughly what they put in each year. Their DAF acts like a donor checkbook—money flows in, grants flow out. These are often small to mid-size donors who love the convenience of a single giving hub for multiple charities, with benefits like consolidated tax receipts and more. They stay engaged with recipient organizations and exemplify the spirit of DAFs as vehicles for giving, not accumulation. DAF education helps them see this as a practical way to organize their philanthropy and makes it easy to add your organization to their regular rotation.
- Tanks let funds accumulate before giving. They’re planning for something—maybe a major campaign, a life event, or a future legacy. They’re not necessarily hoarding; they’re just not ready yet. This is where education becomes activation. Remind them that their DAF dollars are already charitable—set aside for impact. Share stories that inspire them to move resources from the tank to the front lines. Help them see that “someday” can be today!
- Towers hold the largest, most complex DAFs—sometimes tens or hundreds of millions in assets, managed like mini-private foundations with formal governance and multi-year strategies. In fact, DAFs are becoming valuable tools for individuals and families who may have previously opened a private foundation, but now they don’t have to. These donors often have high payout ratios but grant strategically, usually through advisor or family council structures. They value nonprofits that can speak fluently about planned giving, impact reporting, and long-term partnership. When you demonstrate DAF literacy, you signal you’re ready for sophisticated, enduring relationships.
The point isn’t to judge these behaviors—it’s to meet donors where they are. And that requires understanding how DAFs actually work, not putting blinders on to their potential.
Avoiding DAFs Isn’t Risk-Free—It’s Relevance-Free
Refusing to talk about DAFs because they’re imperfect is like refusing to engage with social media because it can be messy. All you do is remove your voice from the conversation.
Donors aren’t waiting for nonprofits to bless DAFs. They’re already using them. The question is whether you’ll be part of their decision-making or simply the recipient of an occasional anonymous check.
By avoiding broader DAF promotion, organizations cut themselves off from a pipeline of giving while also ensuring they won’t be at the forefront of the conversation. Someone else will be—either another nonprofit, a financial advisor, or a DAF sponsor.
Donors will keep opening DAFs whether you talk about them or not. The question is: do you want to be part of that conversation or not?
When nonprofits lead on DAF education, we reclaim the narrative. We show donors how to use these tools for connection, not distance—for action, not warehousing.
The Bottom Line
DAFs aren’t the problem. Disconnection is.
Giving donors more options will always be a way to expand philanthropy. We shouldn’t presume to know what tools and choices are better for our donors than they do. DAFs will continue growing in popularity, and falling into a passive approach—simply saying “we accept DAF gifts”—is leaving money on the table. Showing donors how and why to use them grows engagement.
By stepping up as educators and partners—explaining what DAFs are, how to use them well, and how they turn assets into impact—nonprofits make themselves indispensable in the modern giving landscape.
