If you’ve been hearing a lot about donor-advised funds (DAFs) lately, it’s because this form of charitable giving has become the fastest-growing giving channel in Canada. In our CharityVillage Connects podcast episode, The Surge in Donor Advised Funds: How They’re Reshaping Canadian Philanthropy, we spoke with a variety of sector experts and planned-giving professionals to discover more about how DAFs are shaking up Canadian philanthropy. 

One of these experts was Chantelle Ohrling, who, at the time of the interview, was the Philanthropy Officer, Legacy/Planned Giving at Ecojustice Canada (she has since moved on to the David Suzuki Foundation as the Senior Officer, Legacy Giving). Chantelle provided us with a fundraiser’s perspective on DAFs and how organizations can effectively harness this increasingly popular way of giving. 

We asked Chantelle to offer her thoughts on the opportunities and challenges presented by the rise in donor-advised funds. 

Chantelle Ohrling: I think it’s really interesting that DAF donors give larger average gifts and are often multi-year supporters. And I’ve also been hinting at how DAFs can be used to ease administrative burdens for complicated gifts for charities. So with gifts of property, gifts of private company shares, art, these are all burdens that require a lot of assessment and gift agreements for smaller charities, but a foundation can take that burden on through a DAF. So that’s a huge positive, and I think it is a very interesting strategy for organizations.  

But there are huge challenges in the sense that again, 90% of that gift is often sitting in the account, and there’s a delay between donation and impact. Right now, we’re in a poly crisis. There are myriad issues going on, with charities facing the brunt of these, and it’s really important that these gifts get out promptly. 

And it’s challenging for smaller charities to update the added campaigns to the work that they’re already doing. I kind of consider DAFs are planned gifts; at the heart of them, they require a financial advisor and a plan to establish. Our philanthropy team thankfully shares the responsibility of thanking and stewarding these gifts, but we should treat DAFs as planned gifts still. And to me, this means holistic relationship building, especially with the challenge of donors being anonymous. I find that when you disperse that into all of your channels and ensure that you’re building holistic, long-lasting relationships with every donor, through every communication that you have, then the challenges ease themselves a little bit.  

My friend Abigail Oduel had another really great quote in The Philanthropist about how you can go down a rabbit hole trying to find out who the donor is, so you can thank them properly. But if your entire organization is always grateful, then it’s not as important to recognize who that one donor in particular is. 

With anonymity being one aspect of DAF giving, Chantelle expanded on how this can impact gift acceptance policies and stewardship. 

Chantelle Ohrling: At EcoJustice, we have a very strict gift acceptance policy. So we can’t accept gifts from any of the big five banks, for example, because we could potentially litigate against them. We won’t accept any funds from the fossil fuel industry or other extractive industries that we could potentially be litigating against. So, it’s very important for us to know who the true donor is. 

We have people on every team who will investigate a company or a new donor before accepting a gift to ensure that we’re not violating our gift acceptance policy or making things harder for our program side. So that is a challenge. It could mean that you are accepting gifts from people who you normally wouldn’t. But I do think that if it’s anonymous, then that kind of clears it. They aren’t associated with the organization as clearly. So, I think that the DAF is a great third-party way.  

There’s no regulation or national policy for foundations on whether or not they’ll pass on gratitude or how to do that. A lot of time is spent trying to figure out how to get in touch with this person, even if it’s just a letter that the foundation can pass on, and how do we do it to their standards so that it does get passed on. Like with traditional grants as well, those reporting barriers, they can be very laborious for small teams and take up a lot of administrative time and resources. 

We asked Chantelle about some of the stumbling blocks that are preventing organizations from accepting DAF gifts. 

Chantelle Ohrling: I think it’s going to require a lot of education. Like I said, under-resourced fundraising teams are stretched thin and trying to add another campaign that is siloed could be very challenging. Updating assets is always laborious and time-consuming. There is also the lack of understanding surrounding the administration of DAFs. 

Foundations can help us out by making that very clear with a cover letter, which covers what we need to do on our end. If we’re allowed to know who the donor is, how can we communicate that with them? Or can we pass on a letter to an anonymous donor? That would all be very, very helpful.  

I think that another stumbling block can be outdated systems or a lack of clear internal policies. For example, if accounting, IT, legal teams aren’t aligned on how to accept DAF gifts, especially non-cash assets, organizations can get stuck. It’s important to have accessible internal procedures on how we are accepting this gift and how we are stewarding this gift. That can turn hesitation into action. 

Chantelle offered some thoughts on how nonprofits and charities can get started with trying to attract DAF gifts. 

Chantelle Ohrling: I think a very easy first step that everyone can do is just make it very clear that you accept DAFs on your website. I can hear my friend Mike Todd in my head right now, because he says this all the time. But they can’t leave you a gift if they don’t know that it’s possible. Make sure that your website and main communication channels are letting people know that you do accept DAFs.  

Another way would be to highlight a donor story. If you can find someone who is happy to talk about the gift that they made, the benefits of them making that gift in that way, that can be very powerful. We all have a good donor story. And I would, and this is a personal wish of mine, but instead of just making the messaging “give through your DAF”, I would suggest making it spend down language: empty your DAF, meet the moment, now’s the time. Let’s see how many resources you really have to meet the moment.  

Larger charities with all of the resources and planned giving teams should do DAF-specific campaigns. So that can start with a donor story or working it through to monthly donors, long-term, long-time monthly donors are a really great prospect for that as well.  

And apart from foundations giving us a helping hand, professional advisors could also give us a helping hand. I’ve learned recently that there are some financial advisors that benefit from retaining assets under management when certain DAFs are open. So they can be having those conversations with their clients as well about spending down their DAFs or encouraging them to make gifts from those DAFs. 

Want to hear more from Chantelle Ohrling? Listen to her full interview in the video below. 

Listen to Chantelle Ohrling and other sector experts discuss the growth of DAFs in our new podcast episode. Click here to listen.