DAF Contributors Outperform Other Donors in Generosity and Retention

  • Donors who contribute through donor-advised funds (DAFs) tend to be more generous and long-term contributors.
  • DAF-generated revenue grew by 214% from 2019-23, while revenue sourced from non-DAF donors increased by only 1%.
  • The study found that DAFs provide a promising source of growth for nonprofits amidst flat or declining overall giving.

A study by Chariot and K2D Strategies reveals that donors who contribute through donor-advised funds (DAFs) are more generous and tend to stick around year after year. The report, which analyzed data from 20 nonprofit organizations including the American Cancer Society and the March of Dimes, found that DAF-generated revenue grew by 214% between 2019 and 2023, while revenue sourced from non-DAF donors increased by only 1%. The study comes amidst scrutiny of DAFs and potential rule changes. Despite concerns, the findings suggest that DAFs are a lifeline for nonprofits.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about the study conducted by Chariot and K2D Strategies on donor-advised funds (DAFs) and their impact on nonprofit organizations. It presents data from various sources, including revenue growth and retention rates of DAF donors compared to non-DAF donors. The article also discusses the potential changes in IRS rules regarding DAFs and provides context on the growth of DAF assets and grants over time. However, it could have been more concise and focused on the main points without including unnecessary details about unrelated topics such as affordable housing and coolcations.
Noise Level: 3
Noise Justification: The article provides some useful information about donor-advised funds (DAFs) and their impact on nonprofit organizations, but it also includes some irrelevant details such as mentioning unrelated topics like affordable housing, coolcations, and community foundation presidents’ opposition to potential IRS rule changes. The article could have focused more on the study’s findings without diving into these tangential subjects.
Public Companies: Chariot (), National Philanthropic Trust ()
Private Companies: K2D Strategies
Key People: Karin Kirchoff (Founder and President of K2D Strategies), Mitch Stein (Head of Strategy at Chariot)

Financial Relevance: Yes
Financial Markets Impacted: The article discusses donor-advised funds (DAFs), which are tax-deferred charitable savings accounts that have seen significant growth in recent years and impact nonprofit organizations’ fundraising. The IRS is considering rule changes to taxable distributions from DAFs, potentially affecting advisor fees and requiring a certain percentage of assets to be distributed annually.
Financial Rating Justification: The article discusses the financial relevance of donor-advised funds (DAFs) and their impact on nonprofit organizations’ fundraising. It also mentions potential changes in IRS rules that could affect DAFs, which may have an impact on the financial markets as they are used by major financial institutions.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event in the text. The article discusses a study on donor-advised funds (DAFs) and their impact on nonprofit organizations, showing that DAF donors tend to be more generous and loyal than other donors.

Reported publicly: www.barrons.com