Charities

How nonprofits can help donor-advised fund philanthropists listen and learn

Research shows that people with donor-advised funds tend to look for greater impact and for a more organized and thoughtful way to do their philanthropy. One of the ways they can do that best is by listening to the charities they support.

By Pamela Norley and Elaine Martyn

Several years ago, one of our donor-advised fund (DAF) donors began volunteering at the Boston-based nonprofit City Year, complementing an annual grant recommendation of $2,500. In addition to the support already provided by City Year staff in high-poverty schools around the country, volunteers offer supplemental tutoring, mentoring and other services for students, all with the aim of closing the achievement gap.

This year, in addition to continuing her volunteer commitments, our donor increased her grant recommendation to a five-figure sum. One element critical to that decision? The opportunity to hear suggestions and comments from teachers and staff in the schools where City Year tutors and mentors, as well as from the students benefiting from the programs.

Their direct feedback, she explained to the philanthropic strategist she works closely with, gave her greater insight into the challenges they faced and how City Year was meeting the needs – convincing her of the value and impact of increased support.

As the use of DAFs – accounts with the sole purpose of supporting churches and charities – continues to rise, this example illustrates how DAF donors are poised to advance an emerging practice in philanthropy: listening to the organizations and people they are trying to help. To listen well, they will need the help of nonprofits they fund.


The mindset of DAF donors

Far from being an isolated example, our research shows that the choice to establish and use a donor-advised fund may predispose its holder to value feedback. DAF giving is rooted solidly in the donors’ desire for greater impact–both in terms of maximizing financial resources for giving, but also for creating a more organized and thoughtful approach to philanthropy, including selecting which nonprofits and projects to fund. That’s why collecting – and importantly, applying – learnings gathered from listening to the individuals receiving services may be of particular value to DAF donors’ decision making.

Read the full story at the Stanford Social Innovation Review. 
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