Donor Advised Funds (DAFs) are a growing vehicle for charitable giving in the UK. As they grow in popularity we look at how DAF Providers (also known as DAF Sponsors) including The Charity Service can work with the charities they support and how charity fundraisers can look to increase the funding they receive from DAF donors.
What is a Donor Advised Fund (DAF)?
A DAF is a philanthropic fund held by a registered charity such as The Charity Service which allows major donors to make a charitable donation, receive immediate tax relief and then recommend grants over a period of time (typically several years). Donors may choose to make further donations into their DAF to support their long term giving strategies. DAFs are a growing vehicle for charitable support in the UK due to the low administrative burden, immediate tax relief and flexibility they offer.
Many gifts given through Donor Advised Funds are anonymous (see our blog post Anonymous Giving Through a Donor Advised Fund) which means that many charity recipients can only contact the donor through the DAF Provider. Charities may want to ensure the donor is stewarded appropriately or look for opportunities to ask for further funding. In other cases charities are aware of Donor Advised Funds and are looking for ways to raise their profile amongst DAF holders in the UK. In both these situations charities will need to work with the DAF Provider directly.
At The Charity Service we recognise that we work with both donors and with the charities they support and we would like to facilitate these relationships in ways that work for everyone.
A Donor-Led ApproachÂ
At The Charity Service we take a donor-led approach. That means that we facilitate donors’ existing giving strategies or for those who would like philanthropy advice we will support them to develop a giving strategy that’s based on their motivations, interests along with other factors such as their appetite to risk. We only research and carry out due diligence on charities towards the end of the process when we have narrowed down the donor’s area of interest and approach to giving.
We don’t maintain a list of “recommended” charities as that would be too administratively burdensome to maintain and we don’t typically pass on charity information to donors unless they ask us to. Our advice to charities looking to raise funds from DAF holders is to remember that Donor Advised Funds are primarily a mechanism for giving and that the best way to reach these donors is through your existing fundraising strategy with a particular focus on major donors.
We would also recommend that charities maintain a web presence and keep up to date with reporting so that if we do start to research a particular cause of area for support the organisation is easy to find. Charities may also like to look at our due diligence process to see whether their organisation already meets our criteria.
For Charities Receiving Funding Through TCS
When it comes to making a gift, many of our donors prefer to remain anonymous. Sometimes that is because they don’t have the time or energy to manage relationships with the charities they support. But otherwise we are happy to pass on reports, thank you letters or other materials if the donor would like to receive them. In some cases a DAF donor is happy to be identified to a charity. If that is the case we may pass on their name or other details with their permission. In either case we will try our best to facilitate this relationship and we are always happy to hear from our charity recipients about ways in which we can improve this process.
We also try to make the grant-making process as smooth as possible from an administrative viewpoint. We would encourage our charity recipients to discuss with us the ways in which we can work best together to minimise any administrative burden and ensure our grant-making process works well for all parties.
For charities looking for more information about working with The Charity Service as a Donor Advised Fund Sponsor you can contact our Head of Philanthropy, Rachel Tomlins at [email protected]
