Giving Tuesday vs. Donor Advised Funds

By Laurence A. Pagnoni, MPA

As Giving Tuesday comes around on November 30, I am asking you to think deeply before you commit to promoting it.

My annual struggle over whether to include Giving Tuesday (GT) in my year-end fundraising plan is in full swing.

This year, I am distracted by the gargantuan untapped revenue that you can access from those donors with Donor Advised Funds (DAFs) — upwards of $140 billion. I am asking myself if instead of focusing on Giving Tuesday, would it be more lucrative for me to focus on cultivating and soliciting those donors with Donor Advised Funds?

Your Decision

Don’t get me wrong, I am a fan of Giving Tuesday, but only when it’s a lucrative tactic among your other fundraising approaches. For many nonprofits, the means does not justify the ends.

You should consider skipping GT, especially if you have other parts of your year-end giving program designed and ready to launch, and most especially if your social media platforms are not what they could be. I parse out the reasons for and against here.

But even if you are all in on GT, DAFs also deserve your attention.

The nonprofit sector goes silly over Giving Tuesday. Yet all that effort, time and clamor raised $800 million last year. By comparison, tapping just a meager 1% of the $140 billion available today in DAFs would produce $1.4 billion!

See why I am asking you to think deeply about whether GT is right for you?

I suspect many of us gravitate to GT because it’s easier to implement.

Finding DAF’s requires more effort. How do we find out who has a DAF? How do we research who has DAFs when there’s no public information about them?

Here are three steps to take to secure DAF funds:

1. Install the DAF Widget at Your Website

The DAF Direct Widget is the place to start.  This widget plugs into three of the largest DAF managers: Fidelity, Schwab, and Bank of New York. These providers account for a large chunk of DAF money and their minimums make for great prospects.  When you have the widget on your site or donation page, not only does it take someone to their account, it is restricted so that person can give only to you.

You can download the Widget here. (You can also check out this excellent FAQ). It costs nothing. All you’ll need is your nonprofit’s 501c(3) Tax ID number.

2. Start Surveying Your Donors

Are you surveying your donors and asking them how they prefer to make their contributions? That’s a good way to find out if they have a DAF. On your list of boxes to check about how they want to give, include a check box for DAFs. You can find a sample donor survey here.

3. Get Serious About Prospect Research

I am often impressed with how much development officers know about their donors. But the fact is a lot of information about a donor’s capacity to give is hidden. Advanced donor research can surface that crucial information for you and determine their propensity to give.

The hidden information is especially relevant when you are seeking transformational gifts — gifts that cover multiple years, are made in exchange for naming opportunities, and grow your reserves.

The advanced research I am talking about allows you to have a more informed conversation with your donors. While you need deep research in order to close on the highest gifts possible, getting that data is time consuming and complicated.

Worse, data vendors usually overwhelm you with more information than is actionable.

In the case of one LAPA client, their initial reservations evaporated after we completed our research. We found 373 hidden major donor prospects just within her own donor database—and 47 of them were donor advised fund holders! At the end of the research process actionable engagement plans were appended directly to their donor base, and the donor cultivation steps were scheduled in her calendar. Now, that nonprofit is a believer.

Oh, I almost forgot! We found an additional 3,500 new value-aligned donors that were then added to their donor pipeline. Finding new donors is the holy grail of fundraising. Advanced Prospect Research produces the highest quality donor data at several levels. I explain more here in this white paper about advanced donor research.

If you’d like to talk through where you are with these three steps, contact Brooke Bryant, CFRE, our Managing Director.

What is your thinking about this year’s Giving Tuesday? What do you think of my three recommendations? Please let me know by commenting below.

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