← Nonprofits Are Messy: Lessons in Leadership | Fundraising | Board Development | Communications
Nonprofits Are Messy: Lessons in Leadership | Fundraising | Board Development | Communications
Ep. 235: Donor-Advised Funds Demystified
00:48:12
Donor-Advised Funds (DAFs) are booming—but most nonprofit leaders still find them confusing or inaccessible. In this episode, Mitch Stein from Chariot joins Glennda Testone to bust common myths, explain how DAFs work,
Loading summary
Transcript63 lines
- [00:00]
A
Hi, my name is Glenda Testone and I'm the CEO of the nonprofit Leadership Lab and a senior partner at Joan Gary Consulting. I'm a huge podcast fan ranging from true crime to politics to well being and wisdom. I'm also a guest and sometimes host on this podcast and for all of my career I have been living Nonprofits Are Messy As a leader, both in board and staff seats, I come to you dear listeners, having for decades run and walked in your shoes. I truly get what you are facing and going through and I want to help. So today on this episode we're going to talk all about something that I know I guarantee you have heard about. But I suspect even though you've heard about it, I imagine like me, you don't know enough about it. The topic today is going to be dafs. I said dafs, that's Donor Advised Funds. Today we're going to learn what we need to know from the most wonderful and knowledgeable person about these mysterious dafs. Mitch Stein is my guest today and he is the head of Strategy at Chariot, a financial technology company focused on donor advised fund payments. He has a lot to share and and trust me, we have a lot to learn from him. Get ready to be amazed and probably get ready to take some notes. Welcome to Nonprofits Are Messy with Joan Gary and Experts. This podcast is your go to space for insights, advice and inspiration designed to help nonprofit leaders overcome challenges and drive impact. Whether you're navigating small beginnings or leading a larger organization, we're here to support you every step of the way. Together with Joan and a diverse group of expert guests, we tackle the big questions nonprofit leaders face and offer actionable advice to fuel your leadership journey. A special thank you to donorperfect for sponsoring this episode and supporting nonprofits like that we love. Now let's jump in. Dear listeners, let me tell you a little bit about Mitch and then we're going to dive deep into the deep end of dafs. I'm going to try to stop alliterating through this entire episode. At Chariot, Mitch leads the company's major sector wide initiatives like the DAF Fundraising Report, DAF Day and has been a featured speaker at dozens of conferences and workshops. Prior to joining Chariot, he founded a nonprofit technology company named Pond, which was a marketplace to connect nonprofits with the best vendors for their needs. Before that, he was an investment banker at Goldman Sachs for seven years, most recently serving as the VP of the Technology Banking team. He is also an avid nonprofit fundraiser serving on the board of the LGBT center and, and a longtime writer on Cycle for the Cause, the Northeast Age Ride. That is actually how I met Mitch, as I am the former executive director of the center. So, Mitch, let's go back in time. Tell us how the heck you got to where you are. From sort of little Mitch to the Mitch you are now who is an expert on DAFs and helping people understand what the heck they are.
- [03:40]
B
Yeah, for sure. Thank you, Glenda, for that Nice intro. Sorry to make you talk for so long about me. Am I the first former board member of yours that you've gotten to interview on this podcast? So that's a big honor, but Glenda has played a huge role in my career. And so this is really fun to join and have this conversation because, like you mentioned, I was working at Goldman Sachs in investment banking for what felt like a lifetime for anyone who's familiar with the typical workload over there. But I was getting more and more interested, engaged, and drawn to nonprofit work. More specifically, the center. I was invited to join their team on Cycle for the cause in 2016, and it really resonated with me because I had lost an uncle to aids and my dad was also interested in joining the ride. So we ended up doing it together. And I had no idea, like, what would happen. I didn't have any big expectations. We just sent an email out to some co workers, and all of a sudden we were raising like, tens of thousands of DOL per year for this ride. And it just became a huge passion project and just kept moving closer and closer to it. Until today, where I get to work at this really cool intersection of finance and fundraising and technology and philanthropy, which are all the kinds of things I was doing previously, both inside and outside of work. But now it's all my job, which is really nice.
- [05:02]
A
Totally just a shout out to the Steins. You were awesome on the ride. I hope you're doing well out there. We miss you. Well, I do. I'm not there. Maybe you're still there. It's great.
- [05:14]
B
Yes. Thank you.
- [05:16]
A
Awesome. So thank you for summarizing that for the listeners. I know your story, but I do think it's so interesting how a personal decision to get involved in a bike ride kind of drew you into this nonprofit world and the intersection of that and finance, which is where you live now. It's very cool. So I guess the first question I have for folks is, get ready. We're going to learn a lot. What is a daf?
- [05:44]
B
Yes, it's a word that my partner has to hear me say way Too often, because anytime someone asks me what I do for work, I always first have to say, well, do you know what a DAF is?
- [05:56]
A
Yes.
- [05:57]
B
So a DAF stands for Donor Advised Fund. I think the best way to understand it, if you're unfamiliar, is that it's a lot like a 401k for retirement or an HSA for healthcare costs, but for philanthropy. So in a similar way that for those two instruments, you're putting tax advantage dollars into an account that can be invested in the market, but then has restrictions on how you can use it for a specific purpose. Similarly, with a donorized fund, you put funds, it can be cash, it can be assets into an account, it is now part of a charitable entity. So you get a tax write off, it qualifies for a tax write off, I should say that upfront contribution. And then once those money or that money or those assets are in the account, they can be invested in the market and grow tax free over time. And you make grants to qualifying organizations out of that account whenever you like. And the important thing to remember is that it is irrevocable. So there's no takesies, backsies. Once you put money into a DAF, which is a really big difference from a 401k and it's not like you can take it out with a penalty, it has to go towards, towards a qualifying charity. And so that irrevocability does some really cool things to your giving psychology. You now have this like dedicated pool of funds that you've already committed to giving. You've taken like the hard budget step out of the way and now you get to focus on like what you want to support, what you care about, making a difference, like feeling the joy of giving. And for anyone who's tried it out, you can really feel it and it's really powerful.
- [07:37]
A
So quick question on that and thank you for explaining it that way. We've talked about it before, but I feel like every time you explain it, I have an even better understanding of what it is and what it isn't. And that's really helpful. Since it's invested in the market, is it possible that your daft funds go down like dip below? Is it like the stock market in that way?
- [07:59]
B
Yeah, I mean, it depends where you have your DAF and like what type of investments you elect. So how like aggressive you want to be with your investing portfolio. I think most people in their DAF assets are usually like invested in some type of index fund. And so yeah, those from one year to the next and Month to month or day to day, those things can be moving. But just like with your savings and investment, like over the long run, that those things move upward so that you are getting that incremental benefit to your giving and that the tax benefits are, you know, for people that are contributing larger amounts to these funds are significant because especially if you have an appreciated asset like you've got some shares of Nvidia that you happen to, for any, any market watchers out there that you happen to buy 10 years ago and you're feeling pretty amazing about it now, they've gone up about a thousand times in value. You'd have a pretty hefty capital gains tax bill if you just sold that in the open market. But by contributing to your daf, not only do you avoid the capital gains bill, you also get to write that full value off your taxes. And now all that accrues to your giving and it continues to grow tax free in the account.
- [09:10]
A
Yeah. One question I want to ask. At some point, it feels like this is not the right moment, though maybe it is at the time that we're recording this, not the time that it will air. But It's July of 2025 and we have just had the Senate and the House pass and the president sign a big tax and spending bill. Is there anything, briefly, I know it just happened, but is there anything coming out of that bill that is going to impact folks around dafs and you don't have to answer that now. You can, we can come back to it at the end. I'm just curious if there's anything you want to share.
- [09:48]
B
Of course I'll answer. I told you no question was off limits. So I have to be, I have to be true to my word. Yeah. So there are huge impacts and I think it's like still filtering out to financial advisors and individuals to like piece together what this all means. But starting next year for an individual person will have a thousand dollars of charitable giving that they can deduct above and beyond the standard minimum deduction. And for a married couple filing jointly, that's up to $2,000. So that's like everyday donors for the past, whatever eight years have not really. Even when we say tax deductible benefits, it's very few donors that are actually getting those benefits because they just take the standard minimum, which went way up under the first Trump administration. And so while that helps simplify filing taxes for a lot of people, from nonprofits perspective, it wasn't great because fewer and fewer people were seeing that benefit So I would expect a lot of thousand dollar donations near the end of the year. $2,000 donations where someone's tax advisor is like, hey, you can get this benefit if you're planning on giving. But the important thing to note from the daft perspective is that they qualify for that same benefit. So now a tool that historically was kind of reserved for the wealthy or much more common amongst like the uber rich has had this trend already happening in the years of really democratization of DAF usage for the organizational benefits. I know we'll get into this more, but just like one place you're giving one, you know, one dashboard to see all of your gifts so you're not hunting for emails and receipts, all that kind of stuff. But now also those lower dollar givers using a DAF are going to get a tax benefit for it. So I would see. And we have like gofundme just launched a DAF product. And so I think there's a combination of things here where we're going to see a real proliferation of more mass market DAF usage, which should be, I think is very exciting for the sector because those aren't people that are like hoarding wealth by using a daf. I think it's like we're getting more and more examples of people demonstrating all of those positive benefits of the daf. So that's on like the mass market end, on the upper end for the super wealthy people, there is a cap for the total amount of deduction that you'll be able to take starting in 2026 and I believe that is 35%. And again these are like high level takeaways. I'm not like the total expert on it, but this is my understanding, which means this year I think we're going to see some huge contributions to DAFs before there is a cap starting next year by the super wealthy and huge contributions to nonprofits. So I think it cuts both ways where folks that are giving directly to nonprofits have an opportunity to make an outsized gift while they can still get the full benefit if they thinking about it. And similarly if they wanted to move more assets into a daft fund at some point in the next few years that like now's the time. And so I imagine it'll be a very compelling call to action before the end of the year, this year.
- [13:03]
A
Got it. Well, more, more to come. I mean we're still in the middle of 2025 and it seems like a lot of things are going to change around this in 2026. But thank you for giving us a sense of what we should keep our eyes out for. And it seems like a great time to play a little game. So we're going to play a few rounds of myth versus fact. And the way this works, Mitch, is you throw out a common myth. I know some, but I'm sure you know more than me, given that this is what you do full time. Throw out a common myth that people have about DAFs. And then can you tell us what the facts are? Because as you and I started talking and preparing for this, I was. My mind was blown several times. So have at it.
- [13:51]
B
Yeah, I'd say the single biggest one, which you've sort of touched on already is that DAFs are for the super wealthy and that like exclusively for the super wealthy. And it's only like kajillionaires that are using this tool. There are over 3 million people using donor advised funds today. And while the average account size that's disclosed at like the industry wide level is over $140,000, when you look at the medians, you can tell that that's like very skewed by some very, very large accounts. But for folks like Fidelity Charitable is the largest staff in the country. They do disclose their median account size and it's a little over $20,000. So like still a donor that every fundraiser would want to have that has $20,000 set aside for giving. But it's not just these massive supermassive donors. And I think that's. That is a common, the most common misconception, particularly among fundraisers, is that like, oh, daft giving and DAF fundraising, that's a major gifts thing, that's a plan giving thing. It's not relevant for the rest of fundraising. And it just like couldn't be farther from the truth.
- [15:00]
A
So if I, I am not a person that has $20,000 to give or put away in a death, but I do probably have $1,000 in a given year that I give away. Am I someone that should consider a daft? I've always thought that's not for me.
- [15:18]
B
Yeah, I mean, I. Look, I'm in a similar camp to you. We actually have an employee benefit for my employer which is becoming more and more common. Instead of gift matching where like each individual donation gets potentially matched by an employer, which is a lot of work for the employee and the employer to all administer, we actually have DAF accounts set up as a benefit where I can get up to $200 of contribution into my DAF, matched one to one by my employer each month. So I just have an automatic credit card like payment into my DAF account every month for that amount automatically matched. And now every time that I get an email, there is a crisis, there's a flood, there's, you know, a bill that pass or an executive, you know, I'm able to do something about it. And I have this like ready set of funds that's not hitting my month to month like budget that is invested in the market in real time and growing. So I think it's very relevant for anyone who gives, you know, consistently because it's just, it's organizing, it's streamlining and it really, it's more about intentional and engaged giving than the tax benefits. Although now, as I said earlier, you'd also be able to just lock in the tax benefits for sure and then like manager giving in a more streamlined fashion because it's one tax receipt then as opposed to like trying to find all of them.
- [16:43]
A
Mitch, when we had originally spoken, you said something about 70% of DAFs are $1,000 or less. Or am I getting that statistic wrong?
- [16:55]
B
You're close. And it's, it would be my second myth, which is not just about, which is not just about the donor being super wealthy, but also regardless of the wealth level of the donor, that people like to use their DAF for all types of giving. Meaning like, so the stat that you're referencing is that 69% of DAF gifts were below $1,000. And that is that stats from the DAF fundraising report, which just came out two weeks, three weeks ago, and I was the lead researcher on that, where we analyzed over $12 billion in fundraising stats over the course of five years from 32 participating nonprofits to compare the DAF giving details and non daft giving details from nonprofit's own data. So it's the only research that's done on nonprofit fundraising data. And being able to see that distribution of looking all daft gifts in the study, which there was over $1 billion in DAF giving over 400,000 transactions, that 69% of them were below $1,000 and it was like 92% of them were below $5,000. So that like mid level to annual giving pool is, it's really common. And I think what that shows us is one, it's not just for your, it's not just for your major gifts team, but you want to make sure that you're activating these donors across peer to peer fundraising. Your annual campaign. If you do in person events, they do some kind of paddle raise, you're talking about like it's everywhere and people, I mean, think about it. If you've gone through the work to set this money aside, that is your tax advantaged dollars, that doesn't hit your month to month budget, you want to use those funds any chance you can. And so we're seeing that more and more and how relevant that is for all kinds of fundraisers, that it's all types of people and they want to use it in all kinds of eligible situations.
- [18:51]
A
Yeah, that's really interesting. I wouldn't think of DAs for peer to peer tend to be lower dollar donations. What's another myth that you've seen out there that you want to bust through with some facts?
- [19:03]
B
I think a lot of people. So DAF users in general do skew a little older. It also depends on which DAF type of DAF that they're using. Like community foundation hosted DAFs do tend to skew a little bit older. And then you've got more like modern mobile first apps like Daffy and Groundswell, et cetera that tend to skew younger. And so I think that especially that combined with the fact that most DAFs do send their gifts as a check in the mail, that daft donors are categorized as offline donors. And the funny thing is that almost every daft donor to make that gift is they have to go log into their computer and look your organization up to send the payment. So like there's this fear to engage with them digitally when actually they already, even if they respond to, if their mail responds, responsive donors to send that gift, they have to go log into a computer. And that that is a missing connection at most. Like especially like direct response fundraising. That's a myth that we've had to correct a lot.
- [20:09]
A
Yeah, yeah, that makes sense. I remember working at the center and getting gifts from DAF accounts and I feel like my impression was that most of the time those were anonymous or hard to track down. Is that a myth or is that true?
- [20:28]
B
That is also a myth. I mean, anonymous giving happens. That's not a myth. But every study that's done on the actual daft fundraising has found that daft gifts are only Anonymous Less than 5% of the time. But there's a much larger amount that is not full. What I would describe as full information, meaning there's usually an option of how much you want to disclose. And so oftentimes people will say like, oh, I don't want to give my address, but I'll share my fund name. And sometimes People will share their address, but it's typically not standard to share an email. And so what the complaint from nonprofits is like, I don't have enough. It's not actionable data. It might not be anonymous, but I just got this thing that was like, the New York City fund at Fidelity Charitable. It's like, okay, well, what am I supposed to do that doesn't give me. You can name your fund whatever you want. And so that's often a challenge. And then I also think because your gift processor or entry person or maybe even outsource that, or they left, and it's a new person, there's just, like, this constant churn, and there's just really poor data tracking practices and standards, so that even if it wasn't anonymous, that person's like, I don't know. I don't know how to do this. So I'm just gonna put it in as anonymous. And we see that all the time.
- [21:49]
A
Yeah, got it. So it sounds like more DAFs are sort of coded or categorized as anonymous when there actually is some information there that charities and nonprofits could get. You just have to kind of dig.
- [22:04]
B
A little bit, establish some, like, shared best practices. And I also think having, like, a standing meeting or if you use, like, slack teams, like, have a channel that's like, mystery gifts or something, like, make it fun, I think. And. Yeah, then. And just, like, periodically talk about it, because oftentimes you're. You have a different person who's like, oh, yeah, Mary Beth told me that she was going to send $4,000 and must have, like, forgot to check to share her name or whatever, and can reach out to the donor, confirm this is theirs. Like, it is a really productive thing, both for stewardship and quality data and your donor experience.
- [22:41]
A
Yeah, I love that. Now I'm in my own head about the fun names that I would have that channel be like, Oprah's Gift. Finally, question mark. That would be a fun one to explore.
- [22:57]
B
I thought you were saying you were gonna. I thought you were gonna say you were gonna name your daft fund Oprah's Gift Fund, which would be really mean for every fundraiser that receives it.
- [23:05]
A
That would be. That would be. So people would be very disappointed with that fund. So. So we are actually. Unless you have any more myths you want to get out of the way.
- [23:15]
B
Mitch, one quick one, because it's really another very important, like, tactical thing on the nonprofit side is I find that that structure where, like, the DAF is hosted by an entity, but, like, it's an individual person making the gift. And oftentimes I know people like think they don't need to thank the daft donor or like they need to thank the daft sponsor when it's the exact opposite. Yes, you do not need to send Fidelity a thank you note. Those people have told me that there's like mountains of mail they're getting, chucking it all in the shredder. But then at the same time I hear from individual daft holders, like, I don't know, I never even heard a thank you from that organization. And not to say it's like oftentimes not easy, especially if there are those data gaps, but that, that should be the priority to thank the donor. And I've heard some fundraisers be like, oh, I thought this was just a gift from the community foundation. And like look deeper into the grant letter to know exactly. No, actually this is from Glenda Testone. She has a fund at the community foundation. And that's who you want to steward and build the relationship with.
- [24:22]
A
Because is it safe to say I'm hanging my head because I can't promise that I've never made this mistake in the past of thanking Fidelity, for example. But is it safe to say that if you do that, the donor actually does not get that thank you? It's not like Fidelity then connects it back and says, just so you know, the center thanked you, Glenda, for your gift.
- [24:47]
B
Yeah, it's a great question because sometimes if it is anonymous or and people just want, especially if it's like a big gift, they got like a hundred thousand dollar gift that was like totally anonymous, like I need to, I need to share something with this person. I need to thank this person and I. And like even if they want to be anonymous, like it'll make us feel better to thank them. And so I would say it's always worth doing so, especially if you can share like not just a form like receipting type letter and especially if it's from a community foundation as opposed to like a big bank or financial services program just because they often are more hands on with their account holders. But I do know people that figure out how to get it through to Fidelity and they're calling their support line and, and I've just found Most of the DAFs I've asked this question of are like, if it's personalized and not a form letter, then yes, we'll pass it along.
- [25:39]
A
Oh, that's good. That's good to know for the listeners out there who are, you know, if you do genuinely just have the name of the, you know, Fidelity Charitable or something. You might be able to track the person down. We're going to take a quick break, but when we come back, Mitch is going to tell us about what we nonprofit leaders and donors need to know about dafs and how we can maximize them to their fullest potential.
- [26:04]
C
Are you a staff or board member of a small to mid sized nonprofit? Now, you might feel alone, but trust me, you are not. I built the Nonprofit Leadership Lab for the millions who are just like you. You'll find time saving resources when your pants are on fire, opportunities to uplevel your skills, and a warm, nurturing private community of what we call superheroes. Thousands of board and staff leaders call the lab home and we'd love for you to join us. Learn more@nonprofitleadershiplab.com podcast all right, Mitch, so.
- [26:39]
A
Let'S start with donors. We have many listeners to this podcast that fall into many different categories. And I realized in talking with you that DAFs impact a number of these different categories. So I wanted to start with donors. Why would a donor use a DAF and not just write a check, which would be kind of old school, or make a payment online, new school literally just flash their phone and do it that way. Why use a daf?
- [27:07]
B
Yeah, it's a great question. We've touched on it a little bit. But it's worth like actually going through in full because this isn't just happening randomly and growing so much randomly. It is because it proves very useful to people for a few different reasons. And the exact reasons any one person uses it can vary. I always like archetypes, even though it's like it's a big world. It's not like as though everybody fits into these three buckets. But in general I think there's and I've spoken to hundreds of different daft donors doing donor interviews. It's on the lower end, meaning like I have for folks listening, I'm doing air quotes with my fingers. The lower end. I refer to that archetype as the organizer. And so this is someone who might not be getting like big tax benefits and they're not contributing appreciated stock or getting into the more complex things. They're just doing it to simplify their giving and really take advantage of those those benefits that end up increasing your giving. Like I end up by setting a goal and setting my recurring contributions and having a dedicated tool for giving. I end up giving more and I'm more organized and I'm more engaged in my philanthropy, which I think Anyone who's a giver, like, those are things you would generally want to do.
- [28:25]
A
Yeah.
- [28:26]
B
And so I think that's where you find this like more mass market appeal of the tool. And then in the middle archetype, I would refer to that as the optimizer. And that's someone who is starting to get into the like, okay, I've got, my financial advisor said, like, I've got some appreciated stock that I could contribute or maybe in a given year I sold a house or I got a bonus and I just had this like outsized income year and I can make a larger contribution this year that's much bigger than I typically would get to charity. And then grant out of that over the next few years and like, you know, surprise, they're end up they're going to grant more because they've already set this aside and we see that time and time again. And it's often like a couple managing it together. And then again you have like one place for both of you to do your giving and not both of you looking up your emails, different places to track down your gifts. And then the, the third archetype I refer to as the builder. And that's like someone that's using this instead of a private foundation. And I think that's kind of like its own category where, and it's definitely an increasing, growing trend where it's just so much easier to manage your giving and grant making out of a DAF account than your own private foundation because you don't have to like file documents, hire an attorney, hold board meetings like all manager financials do. And all like all that stuff is just, you just have an account at this other entity. So for most people, unless you're running like a huge private foundation and you want to do like programming and I don't know, like more complex things, most people are like, if you're just wanting to use this to make grants, then like, why wouldn't you just have a daft? So that's kind of like the spectrum I see from like organizing all the way through to the builder. But it really can be for anyone who, who wants to give, you know, more and get better.
- [30:21]
A
Yeah. Yeah, that makes sense. Okay, so let's shift to nonprofits. Why should nonprofit leaders, organizations probably, maybe especially development departments, why should they concern themselves with dafs? You're just trying to raise money, right? So why do dafs matter in that?
- [30:43]
B
Yeah, and I'm glad you brought up the especially development part department because I would argue it's like it's a really unique element of nonprofit work that ends up cutting across, like, so many different parts of the organization, but historically has been very siloed to major gifts or planned giving. So it's a really good point because it is relevant to everybody for a few reasons. I would say, first and foremost, it's just that this is the fastest growing vehicle of giving in the industry, far and away. In that daft fundraising report that I mentioned, the median year over year increase in DAF revenue in 2024among the participants was 30%. And from the same group, the median change in non DAF revenue year over year was minus 1%.
- [31:31]
A
Whoa.
- [31:32]
B
So we have this stagnant fundraising environment, and you've got one segment that is really skyrocketing and. And it's already at such a big scale. So in 2023, we saw close to $55 billion granted out of dafts to nonprofits and still growing at that. Billion with a B. Yeah, and still growing like that. So it's, you know, it's getting to be close to 20% of individual giving is now happening through DAs and just shifting so fast. And all these tax elements like, this is where the market's going. And I think it's possible to be kind of passive and just let these things arrive and see some shifts there. Or you can make the decision to get engaged and be proactive and have a strategy to make sure you're making the most of that trend. And I think that's where organizations are differentiating themselves. And when they actually do get more engaged, they see the impact of a donor using a daft, how powerful that can be. So, for example, in the DAF fundraising report, one of the coolest things we could do was look at a donor to the same organization that changes their way of giving from a credit card to a daf. Because the reality is that everyone with the daf, by the way, still, every year will, a couple times a year, make a credit card gift. They, like, forget about it. Or they don't. They're like, I'll just make a quick credit card gift. Even though it makes, like, so little sense, you know, because they've already set this. It's like having the gift card in the store and you're like, nah, I'll use. Use my credit card. It doesn't make sense, but it happens because people don't like friction. They just want to do what's right in front of them and fast. But when they do end up switching. So they used to give with a credit Card. But now they use their DAF. We had over 30,000 instances of this in the report study that the switching from one to the other and found the average increase when they switched their, their method of giving was 10x. Same donor, same organization increase their giving by 10x on average. Now there are some outliers. We also look at the median. The median change was 2x100% increase in their gift size for over half of the people who converted. So I just think it goes out saying it's like it's growing really fast. It's already a huge segment and it has at the micro level, the donor level, this really positive impact when you can have access to those funds.
- [34:06]
A
Wow, those are powerful numbers actually. And we are in an environment where things seem stagnant or worse, decreasing. And so to have an area where we're seeing increases in giving and funding is really promising. I'm curious. I asked about nonprofits, but there are a number of foundations that are also nonprofits themselves. And whether or not they are, they may manage DAFs. What do those folks need to know? That feels like a unique category to me within that nonprofit category. But what are those like community foundations? DAF providers need to know.
- [34:49]
B
Yes. It's such an important question that I find as I've spent more and more time and I've spent increasing amount of time with that audience, like daft providers and community foundations in particular, there is no source of information on like the strategy of how to like run and use your daft. It's incredibly limited. I was just at a conference in June called, that was the Council on Foundations conference leading locally in Minneapolis. And I just had like met dozens of people from community foundations managing DAFs. And the questions they were asking me, it was just very clear like, oh, there's just like no resources on how you make the most of this. How do you engage your grantees in this? How do you grow this business? How do you like make it a good experience for those fund holders? How do you make it a good experience for your grantees? Like, I think particularly at the community foundation level, there's just this interesting dynamic where they're both stewards of the community and the foundation and their assets and their stakeholders, their donors. They sit across like this whole ecosystem. And I just think there's so much opportunity to be more strategic, more like, I just think there's. It's difficult to quote, unquote, promote DAFs. Like there's very few of them that have like a marketing campaign. Actually the, the Minneapolis foundation is probably the most forward leaning. They have an out of home like billboards, sides of buses, like ads. Ads, yes, for their Daft program in Minneapolis. It's really. I'll share some examples if you want to link them like in the show notes or something.
- [36:23]
A
Sure.
- [36:24]
B
But I just think that's just one example where we could, folks could be doing a lot more of it and we have an event coming up or it's not. We, the whole sector has an event coming up in October called daft Day on October 9th. And this is. You've been as a community foundation wondering like how could we better engage our community around dafs and what we're trying to achieve here. Everybody loves a day, take advantage of it, like, you know, hold it, send an email, post on social, maybe get some local press. Like it's really open ended to meet your needs. But would love to work with you on how to collaborate around Daft Day.
- [37:02]
A
Yeah, well, you're. I wanted to add, this is the place actually where I found I expected people to know the most and I've kind of been surprised also that they seem to know the least is the folks, you know, friends and colleagues I have at foundations who manage DAF accounts and it still seems somewhat confusing to them. So you're going in exactly the place my next question was going, which is what is Daft Day? And you know, we talked in the beginning, but let's come back to you work at a company called Chariot and I would love for our listeners to understand what the heck is Daft Day and what is Chariot and what do you all do?
- [37:46]
B
Yeah. So as you mentioned at the beginning, I'm the head of strategy here at Chariot. We play a really unique role in the sector of being like the connector of all things DAFs and DAF giving. So we don't manage any DAFs. We're not a DAF provider. We're not a. We don't provide like the portal where your donors log into dafs. We don't do any of that. We provide the connection points to make it easier for your donors to use their DAF on nonprofit donation forms and fundraising pages with a tool called DAF Pay. It's like Apple Pay, but for DAF giving just to make them super usable in kind of the modern era of fundraising and donating. But we also work really hard to improve the process through which those grant payments are sent and then received and processed by the dafs. So we also started this year partnering with DAF providers to handle their disbursements. And do so in a faster, more secure, easier platform that works no matter which underlying DAF provider they have or tools they're using. This is specifically just for those payments. And so that's really what our technology does. But we also work very hard to enhance the understatement Podcasts like this, we spend so much time and energy on creating resources and spreading them to build education. So the Daft fundraising report is a research initiative we did to just have more information for everybody and make it more approachable and consumable. And I think that the cherry on top is really DAF Day, which was an idea that we started last year to say there should just be a day for dafs. We all have this big focus on it. Nonprofits have so many giving days. Is there a way that we could just kind of unify the sector and bring attention to this one method of giving? And we launched it last year. It was kind of experimental. We launched at the end of July and we're like, hey, this is gonna be in October. We gave people 10 weeks and the activation was incredible. We had like 1200 organizations commit and sign up to join. We had like Docs Without Borders, took out a half page ad in the Wall Street Journal. We had digital ads. We had a takeover in Timestamps Square and just saw amazing results at the actual, like DAF and nonprofit level of, for the DAF providers, a peak day of engagement, referrals and growth in new accounts, growth and engagement of their nonprofit grantees. And on the nonprofit side, raising record sums on that day from Daft donors, discovering new donors, educating their donors on dafs. It's just a great impetus to achieve whatever your focus is.
- [40:27]
A
Very cool. So just as a reminder for folks who may be driving. When is DAF day this year? 2025?
- [40:34]
B
Yeah, it's on October 9th, so it's always on the second Thursday in October. And yeah, if you go to daftday.com you can join the movement. There's no cost. It's just like a. It's just a collaborative effort and we want as many people involved as possible to maximize the impact. And we also, we've got marketing toolkits to help you engage more easily. We've got a whole webinar series on different topics related to DAFs and how to activate on Daft Day, sharing peer examples. And so there's just a ton of resources for you to dig into. And the last thing I'll say is just also don't get overwhelmed by that. It's not as though you need to do everything under the sun. Like, you can start off with an email. Right. It's just there's no wrong way to do it other than just like ignoring it. I think there's something everyone can do at some level and decide how engaged you want to be.
- [41:28]
A
Yeah, Mitch, you're going to exactly the place I want to end the podcast on, which is I want to simplify this for folks so if they've been listening and thinking, wow, this is interesting and I'm learning things. I want to break it down for folks and sort of by category of people we're talking about. So what is one thing a nonprofit leader should do to get into DAFs if they haven't already done it? What's maybe one thing a donor should do, and what's one thing a DAF provider or institution should do to learn more about this topic?
- [42:04]
B
Yeah, great questions. I think I'll start with the donor. I'll go in the same order we did your prior question. I'll start with the donor. And I think if you already have work with an accountant or a financial advisor or that's like a part of your life already, go to them. They're the experts. Like, I'm not, I'm not going to sit here and tell everyone to do this. It's a. I'm not a financial, certified financial advisor.
- [42:27]
A
Do you have any disclaimers to get?
- [42:29]
B
Yeah, that's my disclaimer. I'm not a financial advisor. I'm just sharing benefits that I hear others have. But obviously it's your situation and you should definitely go, go chat with them and see what they recommend. But then, you know, I think you, if you. On Dafday.com, we also have information about how Dafs work, like how to set them up, how to evaluate them. We have a whole guide for donors on, like, ways to think about and assess different DAF options because there's a lot of them out there and it can be a little overwhelming. So I think just start to get more information and talk to your people about what makes sense. On the nonprofit side, I think the one thing is tough because we have so many resources you could take advantage of on the Chariot blog and like different downloads and webinars you can check out. But if I had to boil it down to one thing. On the DAF Day site, we actually have a giving page where donors can go and you through Daft pay support any nonprofit in the country and you can show up as verified and add your logo and like, kind of increase information there by claiming your Chariot account. It's free. Any nonprofit in the country can do it. You'll also receive those digital fast secure payments from participating DAF providers. So just boiling down to one thing, that's something I would check out and I can share more info on it. And on the DAF provider side, I would just committing to DAF Day. Yeah, it's like so low. The bar is low. And every incremental daft that does it is really, really impactful. Right. Because you are connected to an audience of supporters to be activated on this day. And showing your commitment is going to motivate your peers. And it's just, it really helps with the momentum and it should be something everyone wants to be a part of. So you can do that right on dafday.com as well.
- [44:20]
A
Oh, that's awesome. I love that. And thank you for giving us some concrete ways that folks can get engaged and get involved. I'm wondering if you all have. It sounds like there's in addition to the nuts and bolts of like having a DAF and contributing to a daft or getting a, getting a gift from a daf, you're also just doing a ton of awareness. And so I'm wondering, have you all thought of a mascot for this effort? May I suggest Daffy Duck? Have you thought of this?
- [44:53]
B
There, there is a actual DAF platform actually that I use called Daffy, but it's, it's actually an acronym called. It's the donor advised fund for you. But I think there are some trademark issues. So they don't have a duck. They don't have a duck as their mascot.
- [45:12]
A
Okay.
- [45:13]
B
But we've the very, very early days of chariot given like the what the word might bring forth an actual chariot. There was a lot of horse insignia, but when I was one of the first hires after the founders and I, I didn't love the horse. So I said let's focus on a little more professional brand and aesthetic. Wait, Glenda, I did realize. Sorry. There is one other thing for nonprofits that I always try to remind people and that is that they can do right now or whenever they park their car. If they're listening, go to your website and look up your ein. If you cannot find it within three seconds, you just lost a DAF donor. Because if they're not giving through DAF pay where they can like finish the transaction on your site, which some people won't. Right. They just have their own way they want to do it. They want to go log into their portal. They have to look up your organization in their portal. But so many organizations have similar names or a name that is a legal name that's different from their marketing name. And so they try to search by the ean, but then they've got to go find it. And I, I found a lot of people think that it's a private number. Like that it's a that it like.
- [46:28]
A
You shouldn't have it on your website.
- [46:30]
B
Yeah, they think it's like a Social Security number. I have come across that several times.
- [46:35]
A
Interesting. Okay.
- [46:37]
B
Put it in your footer. Put it like, put it everywhere. It's so helpful.
- [46:41]
A
Yeah, I Mitch, when we talked last time, you started taking me through how to make a daft donation or set up a fund and it was it could be complicated to make that donation if the EIN number is not readily available. So I appreciate that very much. It sounds like what you're saying to our listeners. Your parting words is leave the animals at home. Consider finding out more about dafs. And thank you so much for being on the program. We loved having you and if folks want to learn more, we'll have lots of opportunities in the show. Notes thank you, Mitch, for being with us.
- [47:19]
B
Thank you so much for having me. It's great to see you.
- [47:22]
A
You too. Thank you for spending time with us today. We hope this conversation provides valuable insights as you navigate the messy but meaningful world of nonprofits. A special thanks to Donor Perfect for sponsoring this episode and for their dedication to empowering nonprofits like yours to do more good. For more resources to support your work, visit joengarry.com podcast. We think you'll find a lot of helpful things there. Most importantly, thank you for all you do to make the world a better place, one small or large step at a time. Talk to you all next time.