Fundraising during the COVID outbreak: Stress to Donors, it's time to talk about your DAF

Wondering how your organization can raise resources during this time of enormous uncertainty? 

The answer might lie in the $121B Donor Advised Fund industry. For the uninitiated, Donor Advised Funds are monies donated by individuals for a specific tax benefit in a specific year, but instead of going to support the non-profit sector, those funds are managed by (and generate fees for) financial institutions for the future benefit of qualified charities. For those in the philanthropy industry, it has been long argued that DAFs are some of the most unproductive assets in our society – anywhere.

In times of massive social disruption – like oh I don’t know, a pandemic – we should invite reflection about why these vehicles exist in the first place. $121B would do amazing work for the non-profit sector, guaranteeing ongoing services and support for teachers, nurses, conservation workers, homeless advocates, and the like – not to mention lightening the extraordinary mental load brought on by reduced budgets and endowments. Moreover, if deployed prior to the pandemic, would those funds have increased the capacity of our existing social services organizations, hospitals, and research centers to deal with a pandemic at the scale of COVID-19? Would more and better learning platforms exist for our students? Would food banks have more meals, would homelessness have been solved already?

So to the DAF owner I ask you: What are you waiting for? Your local hospital, school, food bank, research institution, land trust, or conservation group could put those resources to enormously productive use. Indeed for many non-profit organizations, except for the most heavily endowed, today is their rainiest day. Some are facing layoffs, cuts in services, reduction in support for community activities, and on and on. If there were ever a time to ask yourself, “Why am I giving my charitable dollars to Fidelity and not into productive circulation?” That time is now.