The donor noticed the change not long after he and his wife began making charitable contributions through a community foundation donor-advised fund. After the sale of a business, the two, who are nearly 70, put the proceeds in a DAF through which they now conduct some 60 percent of their charitable giving.
Charities, however, treat them differently when they give through their DAF, they have found. It’s as if groups assume they don’t want a relationship.
“We do want stewardship,” says the donor, who spoke on condition of anonymity. “But it’s surprising how many organizations seem to say to themselves, ‘OK, that came from a community foundation. There’s no point in sending the annual report, no point sending the invitation, because it’s going to go into the round file.’”
This experience illustrates an all-too-common disconnect between DAF donors and the charities they support. DAFs, which donors praise as an easy way to funnel cash to nonprofits, aren’t always great at passing along information.
This speaks in part to the rapid rise of the DAF industry and less-than-ideal technology and digital interfaces, says Melissa Bank Stepno, CEO of the Helen Brown Group, a prospect-research consultancy. “It’s more of a systems issue; the industry has not yet caught up.”
The digital interface for donors is particularly important, and the default settings for anonymity vary by sponsor. Sixty percent of more than 120 sponsors surveyed by the DAF Research Collaborative set the default so that receiving charities do not get donors’ contact information. Thirty-five percent send only the individual fund name.
Donors who click a box to request anonymity often want only to deflect public recognition. They may not realize that their name will be withheld from the charity, says Danielle Vance-McMullen, a DePaul University expert on donor behavior and fundraising. “Some DAF donors are giving anonymously because they are confused.”
Some DAF donors are giving anonymously because they are confused.
Nonprofits share in at least some of the blame for miscommunication. DAF sponsors send gifts via a host of methods — check, electronic fund transfers, bank wires, and more. A donor’s name and contact information is included in different, often less-than-obvious places — such as a wire transfer note that the bank doesn’t forward to the organization. Some gift-processing officials don’t know where to look or even have time, Vance-McMullen says.
“Gift-entry people are not as well trained as they could be on donor-advised fund gifts,” she adds. “And so information is actually there, but it’s not getting recorded.”
The disconnect means it’s difficult to calculate the rate at which DAF donors are intentionally making gifts anonymously — a common complaint about the giving vehicles. An analysis from the DAF Research Collaborative suggests that fewer than 5 percent of DAF transactions are made with the intent of hiding the donor’s name. But the number of gifts that are de facto anonymous upon arrival is likely much higher, says Daniel Heist, a Brigham Young University scholar who leads the collaborative with Vance-Mullen.
The collaborative has done extensive interviews with DAF donors and fundraisers to understand the information disconnects. It’s putting together a fundraiser “wish list” for DAF sponsors, but it’s also creating a training to help development offices decipher DAF gift paperwork.
“We’re all going through this learning curve,” Heist says.
