Donor-Advised Funds Explained for Executive Directors: How to Be Found and How to Ask

A check arrives from a foundation you have never heard of, for a gift you never asked for, with a note that it was recommended by a donor whose name you may or may not be told. Welcome to donor-advised funds.

Donor-advised funds, or DAFs, are charitable accounts through which a growing share of individual giving now flows, and most small nonprofits receive DAF grants by accident rather than by design. Here is how they work, how to make sure your organization can be found by the people who hold them, and how to ask for a DAF gift without a planned giving officer.

How a donor-advised fund works

A donor contributes cash or assets to a fund held by a sponsoring public charity, takes the tax deduction in the year of the contribution, and then recommends grants from the fund to nonprofits over time. The sponsor issues the grants, which is why the check comes from a name you do not recognize. The Annual DAF Report for fiscal year 2024, now produced by the Donor Advised Fund Research Collaborative, counts more than 1,500 DAF sponsors in the United States, including national sponsors affiliated with financial firms, more than 800 community foundations, and hundreds of single-issue charities. The community foundation nearest you is almost certainly one of them, which matters for how you are found.

Two features shape everything else. The donor already received the deduction, so a DAF grant is not tax-deductible again and your acknowledgment is a thank-you, not a receipt. And because the money is already committed to charity, DAF donors tend to give it: the question is to whom.

The rules that trip organizations up

• No benefits to the donor. A DAF grant cannot buy event tickets, memberships with more than incidental benefits, auction items, or anything else the donor receives in return. Keep those offers out of DAF asks.
• Pledges are complicated. Sponsors differ on whether a DAF grant may satisfy a donor's legally binding pledge. Ask donors to "recommend a grant" rather than to "fulfill a pledge," and let their sponsor's rules govern.
• Acknowledge correctly. Thank the donor for recommending the grant, note the sponsor, and do not state that no goods or services were provided as you would on a tax receipt; the sponsor already handled the tax side.
• Anonymity is the donor's choice. Some grants arrive anonymous. Thank the sponsor in writing anyway; sponsors often forward the note.
• The 2026 tax rules matter. Beginning with the 2026 tax year, the new deduction for donors who take the standard deduction excludes contributions to DAFs, so DAF giving remains a vehicle mainly for donors who itemize and for larger, planned gifts.

The money in a donor-advised fund has already left the donor's pocket. Your job is to be the organization they think of next.

How to be found

DAF donors recommend grants inside their sponsor's portal, usually by searching an organization's name or EIN against a database drawn from IRS records and nonprofit profiles. Being findable means three things. Your legal name, EIN, and address are consistent across the IRS listing, your public nonprofit profile, and your website. Your profile on the major nonprofit information service is complete and current, since many sponsor portals draw from it. And your website has a page or section titled for the reader, "Give through your donor-advised fund," with your legal name, EIN, mailing address, and a sentence on how to recommend a grant. Some organizations add a DAF payment widget that lets donors initiate a grant from the donation page; it is worth considering once DAF gifts become regular. Our article on whether your website is quietly costing you donations covers the page basics.

How to ask

Ask who has one. A single line on the donation form and in the year-end appeal, "Do you give through a donor-advised fund?", identifies DAF donors you already have. Then treat them as the higher-capacity, planned givers they usually are: a personal thank-you, an update on what their grant did, and an invitation to recommend a recurring grant, which most sponsors allow, so the gift repeats without a new ask each year. Include DAF language in every major appeal: "If you give through a donor-advised fund, you can recommend a grant to [legal name], EIN [number]." And ask your board members directly whether any of them hold a fund; several usually do and have never been asked.

Identifying DAF donors in your records, writing the legacy and DAF pages, and running the personal follow-up are steady work our Fundraising department does for organizations without a development team. See how our staff grow major and planned gifts while you lead.

Timing that helps

DAF grants cluster at year-end, when donors review their funds, and around DAF Day, an October giving day built around fund grants that a growing number of organizations take part in. Both are natural moments for a DAF-specific message. Because the money is already set aside, DAF donors also respond well to specific, urgent needs during the year, which makes them the right audience for a bridge request when funding is cut. Our article on rebuilding the budget when government funding is cut shows where that fits.

Questions executive directors ask about donor-advised funds

Do we send a tax receipt for a DAF grant?

No. The donor received the deduction when they contributed to the fund. Send a warm acknowledgment to the donor, and a thank-you to the sponsor.

Can DAF donors buy gala tickets with a grant?

No. DAF grants cannot provide benefits to the donor. Offer the ticket separately and invite a DAF grant for the program instead.

How do we find out which donors have DAFs?

Ask on your forms and in your appeals, watch for grants arriving from sponsors, and ask your board. Most organizations already have DAF donors they have never identified.

Is a DAF grant different from a foundation grant?

Yes. A DAF grant is an individual's gift routed through a sponsor, with no proposal and usually no report required. Steward it like a major gift, not like a grant.

Your mission is bigger than the gifts you can see

Some of your most generous supporters give through accounts you have never asked about, and the organizations they think of first are the ones that made it easy. You do not need to become a wealth advisor on top of everything else. You need a staff that is already keeping your records consistent, already writing the DAF page, and already thanking the sponsors while you lead the mission only you can lead. Find out what our staff can do for you.

Zoya Syal is Content and Production Manager at Nonprofits Engine, where she leads the content and testimonial work for a team that helps small nonprofits get set up and funded.