Is a DAF worth it? Exclusive donor-advised fund report says yes
Jun 01, 2023
For some, the decision to open a Vanguard Charitable donor-advised fund (DAF) can feel momentous. It often involves research, reflection, and the hope that the giving tool will benefit both the donor and the charities they support. In other words, donors wonder: Will it be worth it?
New research from an exclusive donor-advised fund report suggests the investment in a Vanguard Charitable DAF pays off in spades.
New DAF report proves the benefits of a Vanguard Charitable donor-advised fund to donors and charities
Why a donor-advised fund (DAF) is worth it
Why Giving Matters, a first-of-its-kind examination of giving trends among Vanguard Charitable donors over a ten-year period, finds that opening a Vanguard Charitable DAF pays immediate dividends that continue to grow throughout a donor’s tenure.
More than half of new Vanguard Charitable donors in the donor-advised fund report say that they already give more to charity as a direct result of their DAF. Only 1% report giving less.
The percentage of donors who say they give more to charity grows over time. Among donors with ten or more years of tenure, 71% say they give more to charity, and 0% say they give less.
How can donors give more effectively?
A similar trend in the donor-advised fund report is seen in effective giving. An amazing 68% of new Vanguard Charitable donors already say their donor-advised fund helps them give more effectively than before. The number increases to 71% among DAF donors with between 7 and 10 years of tenure, and to 80% among donors who have been with Vanguard Charitable for more than 10 years.
While the definition of effective giving may be different for different donors, Why Giving Matters suggests that common characteristics include:
- Giving more frequently.
- Giving more consistently to favorite charities.
- Giving larger grants.
- Giving more each year.
Donors and nonprofits praise the value of Vanguard Charitable DAFs
“We have been more intentional in building a strategy that spreads giving across local, national, and international partners,” says Charles W., a Vanguard Charitable donor for 18 years, about his giving since opening the donor-advised fund. “We have looked for charities that attack the same complex problems from different angles, so our giving is more strategic.”
Donors like Charles suggest that opening a Vanguard Charitable DAF leads to a change in mindset. Armed with a powerful giving tool and expert guidance, donors begin to think more holistically about what they can accomplish.
“The DAF encouraged us to make a strategic commitment to giving over the next 20 years,” adds John S., a Vanguard Charitable donor of just over two years. “It helped start a conversation as to what is important to us as a family in terms of giving back.”
Nonprofits also see the benefits of DAF, noting the larger average grants and consistent funding over time.
“We have seen tremendous generosity from Vanguard Charitable donors in every single state across the United States, representing over 5% of our recent funding,” reports Razom for Ukraine, a charity closely involved in the humanitarian crisis created by the war.
“As a nonprofit that receives no government financial help,” says a grassroots conservation charity, “donor-advised funds are extremely important for us to complete our missions.”