Donor-advised funds (DAFs) have quietly become one of the most important, and most misunderstood, sources of philanthropic funding. In a recent webinar, Infinite Giving CEO & Founder Karen Houghton sat down with Liza Carballeira, MNM, CAP®, IPA, Founder and Principal Advisor of Epic Philanthropy, to demystify DAFs and give nonprofit leaders a practical playbook for putting this growing pool of generosity to work.

Here's what every nonprofit team should know to scale generosity with DAF gifts.

The DAF numbers tell the story

There are roughly 3.6 million DAF accounts in the U.S. today, holding an estimated $326 billion. In 2024 alone, nonprofits received nearly $65 billion in grants from DAFs, and almost one in four charitable dollars now flows into a DAF rather than directly to a nonprofit.

It's easy to assume this is a major-donor game, but the data says otherwise: 69% of DAF grants are under $1,000, and more than half are under $500.  As Liza put it:

“If you only bring up DAF giving with your high-net-worth prospects, you're missing out on non-major donors who are already giving through a DAF.”

What a DAF actually is

A donor-advised fund is essentially a charitable savings account. A donor contributes cash, stock, or other appreciated assets to an account held by a DAF sponsor, such as Fidelity Charitable, Schwab, the National Philanthropic Trust, a community foundation, or other DAF platform provider.

Because the sponsor is itself a 501(c)(3), the donor receives their full tax deduction the moment they make the contribution. From that point on, the funds can be invested and may grow, and investment earnings are generally not taxed at the donor level. The donor retains only advisory privileges to recommend grants to other eligible 501(c)(3)s, which the sponsor then reviews and, in the vast majority of cases, approves. Read more at IRS.gov.

That last point matters for how nonprofits should treat a DAF gift when it arrives: there's no second tax deduction to offer. If you receive a DAF, it’s important always to send a “thank-you” note. But remember, you don't include gift-value language in your acknowledgment, since the donor already received their deduction when they funded the DAF.

The quiet parts about DAFs that nobody says out loud

Liza was candid about the terminology gaps she sees even among experienced fundraisers. A "grant" from a DAF is not something you can apply for because it's simply the term for a donor's recommendation to give to your organization. 

A DAF grant can never be earmarked for a named individual (no scholarships made out to a specific person), and a signed pledge will actually disqualify a DAF grant, because the IRS considers a pledge a legally binding debt, and a DAF can't be used to satisfy a debt. The fix is simple: change "pledge" to "intention" on any commitment card, and the gift stays eligible.

The same logic applies to gala tables and event sponsorships. A DAF can cover the fully charitable portion of a sponsorship, but it can't pay for anything that provides the donor a personal benefit such as a seat at a gala dinner, a slideshow acknowledgment tied to attendance, and so on. And nonprofits should never "bifurcate" a payment by asking a DAF to cover the charitable portion of a purchase while the donor personally covers the rest because the IRS treats that as one transaction, not two.

Should a nonprofit have its own DAF? 

Both Karen and Liza agree: no. It creates a conflict of interest, since staff could effectively recommend grants to themselves, and if you're already a 501(c)(3), you don't need a DAF to get tax-exempt benefits because you just need the gift to come to you directly.
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5 non-negotiables for attracting DAF donors

Liza shared five concrete, low-lift steps every nonprofit can take:

1. Put your legal name, EIN, and physical address in your website footer — on every page. It's the first thing a donor, advisor, or DAF sponsor checks to confirm you're real.
2. Create a dedicated DAF resource page in plain language, and list a staff contact trained to answer DAF questions.
3. Add DAF giving to your main website navigation, so the page you built is actually findable.
4. Make major DAF sponsor portals easy to find with logos or a widget, and enroll in EFT with sponsors where available so grants arrive faster.
5. Build a one-page verification packet with your legal name, EIN, mission, any special grant instructions, and a short impact statement or story — something an advisor can hand straight to their client.

How to solve anonymous DAF gifts

One of the most common frustrations nonprofits raise about DAFs is anonymity. The good news: most  DAF grants arrive with some identifying information such as a donor name, fund name, or a "recommended by" note. 

Liza's advice is to do some detective work: cross-reference your CRM for addresses, recurring gift amounts, or recent conversations about a specific program. If a donor still can't be identified after that effort, send a warm, general thank-you anyway — just avoid citing a specific dollar amount you're not certain of.
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How nonprofit leaders can get started with DAFs

If your team only has bandwidth for a few changes, Liza recommends starting here: get your legal name and EIN visible on your website within 30 seconds of landing there, audit your CRM for DAF donors who weren't properly thanked and follow up now, and build the habit of promoting the availability to give from a DAF, along with non-cash assets such stock, crypto, and other tax-efficient options. Plus, be sure to include this in every single appeal, envelope, and “invitation to give” at an in-person event.

As Karen summarized, raising more from DAF gifts isn't about chasing a new type of money. It's about recognizing how your donors are already choosing to give, and making it just as easy for them to give that way to you.

Infinite Giving helps nonprofits accept securities, crypto, and donor-advised fund gifts, plus manage cash and investments, all on one platform, with your EIN and legal information built right into your giving page.

If you'd like help making DAF giving easier for your donors, schedule time here to meet with our team.