Nonprofit Lowdown #354: Demystifying DAFs with Mitch Stein
Host: Rhea Wong
Guest: Mitch Stein, Head of Strategy at Chariot
Date: September 8, 2025
Episode Overview
In this episode, Rhea Wong sits down with Mitch Stein, Head of Strategy for Chariot, to demystify Donor Advised Funds (DAFs) for nonprofit professionals. The conversation explores what DAFs are, common misconceptions, strategies for stewarding DAF gifts, and concrete tips to make DAF fundraising more effective. Mitch provides practical guidance, debunks myths, and highlights actionable steps for fundraisers at every level.
Key Discussion Points & Insights
1. What is a Donor Advised Fund (DAF)?
[01:56]
- A DAF is a charitable giving account with tax advantages, likened to a 401k or HSA, but for charitable donations.
- Individuals deposit funds or assets, receive an immediate tax deduction, and can grant out money to nonprofits at their discretion.
- DAFs allow donors to invest funds while they're waiting to donate, providing flexibility and efficiency.
- Notable Quote:
"A Donor Advised Fund is what a DAF stands for. And you can think about it like a 401k or an HSA, but for your charitable giving."
— Mitch Stein [01:56]
2. Growth and Usage of DAFs
[03:08]
- DAFs have existed since the 1930s but have exploded in popularity and assets in the past decade.
- Over $250 billion are currently in DAFs, with $55 billion in grants distributed in 2023—a 6x increase over 10 years.
- Growth is driven by lower barriers to entry and increased mainstream adoption.
3. DAF Fundraising: Strategies and Realities
[04:47], [05:48]
- There's no central directory of DAF holders; fundraising is essentially similar to major donor or individual fundraising.
- "Don’t expect DAF providers like Fidelity or Schwab to promote your organization to their clients."
- Tip: The most effective approach is to integrate DAF language and giving options in your communications and make it easy for donors to use their DAFs.
- Building relationships with estate attorneys or financial advisors is beneficial, especially with community foundations, which are more hands-on.
4. Internal Policies and Disbursement Rules
[08:47]
- No universal IRS-mandated payout rule for DAFs.
- Most DAF providers have internal inactivity rules (e.g., Fidelity will disburse 5% after 2 years of inactivity).
- Practices vary, reinforcing the need for proactive engagement.
5. Common Misconceptions about DAFs
[09:55]
-
DAFs are only for major gifts or big donors: False.
- 69% of DAF gifts in a recent study were under $1,000.
- Many donors of all sizes use DAFs for recurring and small gifts, not just large contributions.
-
DAFs are just a way to give anonymously: Mostly False.
- Only about 4% of DAF gifts are truly anonymous. Most appear anonymous simply due to limited information shared by the provider.
-
Notable Quote:
"Once I've set up a DAF and I've put money or assets there, that's my preferred giving source always... It's like having a gift card."
— Mitch Stein [11:24] -
DAF fundraising should be collaborative, not handled solely by major gifts teams.
6. Stewardship Challenges and Donor Trust
[12:58], [16:42]
- Lack of internal understanding of DAF processing leads to stewardship lapses (e.g. not thanking the actual donor if only the DAF provider is credited).
- Donors may feel ignored if not properly thanked; this can result in lost future gifts.
- Many nonprofits misinterpret a lack of donor information as a wish for anonymity, when it's often just a systemic limitation.
- If a donor truly wishes to be anonymous, the best a nonprofit can do is send a thank-you through the provider.
- Notable Story:
"There was a specific donor who'd been supporting a local organization for three years, making five figure gifts each year. Never heard a thank you. And they reached out to their daft... Please cancel my recurring gift. Like, I don't even get a thank you from them."
— Mitch Stein [13:42]
7. Internal Collaboration and Data Tracking
[20:44], [25:24]
- Encourage collaboration—create shared spaces (e.g., recurring meetings, Slack channels) to resolve DAF gift mysteries.
- Best practices for DAF gift entry are essential for stewardship and retention. Ensure your team knows how to properly code DAF gifts and acknowledge the underlying donor.
- Resource: Chariot’s annual DAF Fundraising Report provides data and advice on data tracking and donor segmentation.
8. The Donor Experience and Acknowledgement Timing
[21:55], [24:01], [24:52]
- DAF gifts often produce "crickets" for the donor—unlike online donations, there's no immediate thank-you or afterglow.
- Internal systems should prioritize quick acknowledgment, even when donor info is sparse.
- Provide mechanisms for donors to verify gift receipt and maintain open communication.
- Notable Exchange:
"With a daf. You've clicked that button to send gifts."
"It's cricket."
"Nothing."
— Rhea Wong & Mitch Stein [24:01-24:04]
9. Campaign and Stewardship Tactics for DAFs
[25:24]
- Conduct DAF-specific campaigns and stewardship moments (e.g., “Happy DAF Day—thank you for your support!”).
- Personalized solicitation (referencing the donor’s specific DAF provider, e.g. "Your Fidelity Charitable DAF") is powerful.
- Use DAF Day (October 9) as a deadline for implementing improvements and for donor education.
- Even small efforts (e.g., a tailored email or a stewardship touch) can have big impact.
10. DAFs in the Overall Philanthropic Landscape
[28:09], [29:52]
-
About 30% of major gifts ($25k+) are now coming from DAFs.
-
Most DAF gifts, by volume, are small to mid-range, but giving via DAF is growing by 20-60% across donation levels, especially in the $1k-$10k segment.
-
Notable Quote:
"69% of daft gifts in the study were below $1,000... The other thing we could look at is... across if you got a hundred gifts over $25,000, how many of them came through a DA? And I think the overall number was like around 30%."
— Mitch Stein [28:37, 29:52]
Memorable Moments & Quotes
-
On DAF misconceptions:
"Everyone listening to this podcast should get a DAF... you can understand the experience from the donor's perspective."
— Mitch Stein [22:55] -
On the limitations of DAF gifts:
"You're already, you're like starting 10ft behind the start line because the gifts arrive days or weeks after they're made."
— Mitch Stein [13:09] -
Direct call for improvement:
"The right time to start thinking strategically about DAF giving was yesterday. And the second best time is today."
— Mitch Stein [25:26]
Timestamps for Key Segments
- 01:56 — What is a DAF?
- 03:08 — DAF history and growth
- 04:47 — How to identify and engage DAF donors
- 05:48 — Building relationships: providers vs. individuals
- 08:47 — DAF disbursement rules
- 09:55 — Top misconceptions and their implications
- 12:58 — Common nonprofit trust mistakes
- 16:42 — Anecdotes on the importance of stewardship
- 21:55 — Tracking and acknowledging gifts, lost donations
- 25:24 — Practical stewardship strategies
- 28:09 — DAFs’ role in overall giving and major gifts
- 30:39 — What is DAF Day?
- 32:04 — Top three action steps for listeners
Actionable Takeaways (Host & Guest Summary)
- Make DAF giving visible:
- Clearly show on your website and appeals that you accept DAF gifts. Consider tools like DAFpay for easy online processing.
- Align internally on data and acknowledgment:
- Ensure the team tracks and credits DAF gifts properly so donor recognition and stewardship are not missed.
- Use DAF Day as a catalyst:
- Use the lead-up to DAF Day (October 9) to improve your systems, donor communications, and to educate your supporters about DAFs.
Resources Mentioned
- Chariot’s DAF Fundraising Report (for data and practical tracking/engagement advice; link available in show notes)
- DAF Day (October 9, annually)
- Chariot’s DAFpay tool for nonprofit websites
This episode is an essential primer for any nonprofit professional wanting to understand, engage, and grow giving from Donor Advised Funds. Mitch Stein’s blend of systems-level knowledge and real-world tips makes DAFs far less mysterious and much more approachable.