Unlocking the untapped benefits of donor-advised funds

Donor-advised funds (DAFs) are one of the most flexible and tax-efficient ways individuals can support the causes they care about most. Simply put, a DAF is a charitable giving account donors use to make contributions, receive immediate tax deductions, and recommend grants to nonprofit organizations over time. 

While many donors may have heard of DAFs, they may not know how to use them—or that they can. At the same time, many nonprofits are still figuring out how to tap into the billions sitting in DAFs to support their missions. 

In this blog, we’ll explain how DAFs work, why they matter for charitable organizations like yours, and how GoFundMe Giving Funds simplify access to this powerful giving channel to help propel your mission forward.

The rising popularity and unrealized potential of donor-advised funds

DAFs have quickly become a central part of the philanthropic landscape. 

According to a survey conducted for Chariot and K2D Strategies and reported by “The Chronicle of Philanthropy,” donations from DAFs grew 214 times faster than non-DAF revenue from 2019 to 2023, with the average DAF gift being 19 times larger than traditional charitable contributions.

As of 2023, total charitable assets in DAFs reached a staggering $251.52 billion—up from $228.92 billion in 2022. 

Despite this growth, a significant portion of these funds remains untapped. Meanwhile, the payout rate to qualified charities from DAFs has stagnated at just 20%, leaving 80% of these assets sitting idle. With billions set aside for future charitable giving, there’s a clear and pressing opportunity to drive more funds into the hands of nonprofits to fuel their philanthropic goals.

Removing obstacles to DAF giving

As DAFs grow in popularity, nonprofits face a key challenge: engaging DAF donors seamlessly and effectively. However, there are several obstacles to overcome. 

To start, donor data related to DAF giving is often incomplete. When charitable gifts come through via grant recommendations from a DAF sponsor, organizations often don’t know who the donor is, making it difficult to follow up, thank them, and build a lasting relationship. The result is a process that can feel disconnected and hard to navigate.

At the same time, many donors contribute to DAFs before choosing a cause—yet traditional DAFs often lack incentives or tools to encourage active giving. This can lead to stagnant funds, especially since many assets held are noncash and take longer to convert. 

This makes it critical for nonprofits to craft their own strategies and dedicate resources to appearing in DAF-friendly spaces.

On top of that, discovering nonprofits within these platforms is often limited, making it harder for donors to find organizations aligned with their interests. When platforms proactively surface nonprofits trending locally, responding to crises, or driving impact in specific areas, donors are empowered to give with greater intention and urgency.

And while DAFs have traditionally been used by wealthy donors, there’s an emerging opportunity to engage new markets, particularly the next generation of philanthropists, like Gen Z and Millennials. In fact, these younger donors are more likely to integrate charitable giving into their financial planning than other generations.

We need solutions that motivate donors to discover causes they care about and distribute their DAF dollars. Giving Funds aim to do just that, offering a streamlined, efficient approach that makes DAFs more accessible and impactful for donors and nonprofits. 

How GoFundMe Giving Funds bridge the gap

Traditional DAFs, which have historically been used by fewer than 1% of Americans, have long been structured around holding assets, often making them feel like a tool for financial strategy rather than a charitable giving vehicle for immediate impact. Giving Funds represent a new kind of DAF—one intentionally built for giving.

Giving Funds provide users with a centralized place to plan, invest, and grow their funds. Plus, they can track progress and manage all aspects of charitable giving on one simple annual tax receipt.

What sets it apart is its focus on simplicity and accessibility. While most traditional DAFs are complex and reserved for high-net-worth individuals with financial advisors and steep contribution minimums, Giving Funds open the door to a broader, more diverse base of donors with no administrative fees and only a $5 minimum balance. 

We’ve designed it not only for those already familiar with DAFs but also for the next generation of givers who increasingly prioritize social impact and establishing a charitable legacy.

Giving Funds help mobilize charitable dollars faster. Rather than letting contributions sit idle, our solution encourage donors to give to their favorite charities now. With smart discovery tools, curated recommendations, and suggested sharing features, Giving Funds make it easy to respond when it matters most.

With Giving Funds, donors can:

• Support over 1.4 million nonprofits within the GoFundMe platform that they already know and trust.
• Receive immediate tax benefits while setting contribution goals that align with their values.
• Use flexible payment methods to simplify the donation experience and remove friction. 

What Giving Funds can do for your nonprofit 

Giving Funds create a ripple effect—what starts as a seamless donor experience becomes a catalyst for nonprofit growth and impact. At a time when donor acquisition is more competitive than ever, Giving Funds open the door to a growing, often overlooked segment of philanthropic givers—many of whom are younger, values-driven, and eager to support causes that align with their beliefs.

With Giving Funds, nonprofits can:

• Become discoverable by a new generation of donors directly within the GoFundMe platform.
• Generate a steady stream of passive revenue as Giving Funds run in the background to support and supplement major campaigns year-round.
• Gain visibility into donor behavior and engagement through data that helps shape future outreach strategies.

GoFundMe’s incentives are mission-aligned, meaning that we succeed when donors give. Everything about the Giving Funds experience drives charitable donations into the hands of nonprofits instead of keeping them on the sidelines.

For nonprofits, this is more than a new tool—it’s a strategic shift that aligns with their goals for reach, retention, and results.

Get ready for the future of giving 

The launch of Giving Funds marks a major milestone in GoFundMe’s commitment to growing the charitable economy and shaping the future of giving. 

With more than $40 billion raised globally, GoFundMe is deepening its investment in the nonprofit space. By improving access to donor-advised funds, we aim to expand participation in philanthropy and unlock more support for the communities that need it most.

This new chapter not only broadens access to giving but also opens real opportunities for nonprofits like yours. As more supporters leverage Giving Funds to strengthen their philanthropic impact, so will your opportunity to connect with donors who are ready to give—many of whom are already active on GoFundMe. 

Make sure your nonprofit has claimed its Nonprofit Page so donors can easily discover and support your mission. 

Want to learn more? Check out our support article on Giving Funds for everything you need to get started.