Strategies To Grow and Engage Your DAF Donors

While DAF donors may be a new audience and revenue stream for many nonprofits to discover and engage, we’re seeing evidence that they aren’t the mysterious enigmatic audience we may be tempted to label them as. As more nonprofits are beginning to tap into this promising channel, we’re learning more about donors who give via DAFs and how to convert them.

In a recent article, The Chronicle of Philanthropy digs into a study of DAF donors from the National Survey of Donor Advised Funds that offers a valuable look into who is in this audience and how they’re donating – and findings show that this audience behaves very similarly to other donors on your list. According to this study, 60% of DAF donors say they give to the same organizations every year and likely to organizations they already have a relationship with.

We’re on the cusp of a significant shift in the industry when it comes to DAF donors. For your supporters, this channel can make it easier to give in a way that’s convenient to them, supported by financial advisors. As donors become more aware of the tax benefits of DAF giving, we may see mass market DAF gifts become more prevalent.

For nonprofit programs, there is exciting potential in growing and optimizing an intentional program for DAF donors. There is an incredibly high amount of money in DAFs in the United States today – with the latest reports showing $54.77 billion in grants made by DAFs in a year and experts speculating that a great deal more funds existing in DAFs than we’re seeing spent annually – untapped and predetermined for charitable giving. Finding a way to maximize your organization’s cut of that available revenue can have a powerful impact on your program.

Whether you’re looking for ways to appeal to an existing audience of DAF donors or invite your audience to give new gifts through this growing channel, we’re excited to share the most important actions nonprofits should take to make the most of DAF giving for their programs.

Understanding Your DAF Donors

For many nonprofits interested in making a dedicated effort to engage DAF donors, taking a look under the hood to assess your own data is an important place to start. We recommend every nonprofit fundraising team start by doing a file analysis of their existing DAF donors. What audience segments are they in – mid-level or mass market? What kinds of messages are they getting? What is their average gift? Are their gifts specific to a certain season, like end of year, and is there opportunity to increase their giving at other times of year? The more you know about this audience, the better you can optimize your appeals and minimize the cost of messaging them.

For one nonprofit partner, we ran a custom analysis to identify that 90% of their DAF donors had only ever given through DAF and that, while 40% of revenue for their mid-level organization was generated by DAF donors, the majority of their DAF donors fell into their mass market audience. This highlighted a key insight: While DAF revenue might make up a significant portion of a nonprofit’s mid-level revenue, that doesn’t mean they automatically should be segmented for your mid-level program. By implementing strategies to target DAF donors through less expensive packages, we were able to drive cost savings and record-breaking net revenue.

Strategies To Grow and Engage Your DAF Donor Audience

Once you have a better understanding of who your DAF donors are and how they’re giving, you can begin to build a program to grow and engage this audience armed with the right data. Here are a few places to focus:

• Speak directly to your DAF donors with customized appeals. It’s safe to guess that your audience of DAF donors will have more funds in their DAF accounts available to allocate toward your organization. So these donors are excellent candidates for targeted mailings and messages encouraging them to give more through their DAF. We’ve seen success with mail campaigns that are similar to mass market appeals with a versioned call to action: “Increase your giving through DAF,” and with unique outer envelopes that mention “your DAF donation” to signal added relevancy to this audience of supporters.
• Invite new DAF donors through targeted ads. For one nonprofit we partner with that sees a significant percentage of their revenue come through DAF, ads using demographics data to target the factors most common for this audience (i.e. age, location, and wealth) are helping them grow their audience of DAF donors. As wider audiences begin to give through DAF, we also recommend testing this approach against a broader range of demographics to determine what’s effective for your unique audience.
• Test into the tactics that increase DAF gifts. Like many other AB tests designed to optimize donation flows, testing where and how donors are offered DAF as a means of giving can provide insights to increase conversions. For one nonprofit partner, we found that putting DAF fields ahead of credit card fields on online donation forms did not hurt performance. In direct mail campaigns, testing DAF-specific QR codes as a reply method can yield similar insights. By running tests like these with your own audiences, you can determine where prioritizing DAF payments can increase these gifts.
• Educate your audience about DAF and how it works. Nonprofits can get involved in the growing conversation by informing donors why DAF is such a great way to give. Over digital, DAF Day in October is a great opportunity to build awareness with your audiences over email – and we suspect that messaging around DAF giving will only increase even more this year. Donor questionnaires can also help your program gain insights into your audiences while educating responders on the opportunity that giving through a DAF provides at the same time.

We’re looking forward to seeing how DAF donors continue to grow and evolve as an impactful audience for our nonprofit partners, and we’re always eager to think through new and creative ways to help organizations connect with each of their unique audiences. If you’d like to chat about how to engage your program’s DAF donors, or just want to talk through ideas together, send us a note at [email protected].

For more insights into the tested strategies that are helping nonprofits drive response across channels, check out more of our blogs – like our recent post from SVP Shannon Murphy sharing more ways to use QR codes to integrate your mail campaign – or, to see how our health care and hospital nonprofits drove response on a major giving day, read our digital strategy report on National Doctors’ Day campaigns.