Demystifying Donor-Advised Funds

Main Takeaways:

• Donor-Advised Funds (DAFs) are utilized to efficiently disburse donations from companies and individuals to nonprofit organizations globally, providing a seamless mechanism for managing corporate giving programs.
• The Blackbaud Giving Fund operates as a registered 501(c)(3) organization that streamlines charitable donations through careful vetting and partnering with Blackbaud’s Anti-Money Laundering Compliance department to ensure donations reach reputable nonprofits.
• Key benefits of using DAFs include quick disbursement of funds, even with no minimum donation thresholds, and increased trust through a thorough vetting process, allowing corporate donors and employees to see immediate impacts.
• In selecting a DAF provider, companies should ensure the provider manages eligible charities diligently, encourages donor-nonprofit connections, and has the operational capacity to fulfill grant requirements effectively.

Powering corporate giving programs requires so much more than a portal to make a payroll donation or apply for a matching gift. Behind the scenes, disbursing these funds is no small feat!

If you’re in the corporate social responsibility profession, there’s no doubt you have heard the term Donor-Advised Fund (DAF) before.

When it comes to disbursing donations, DAFs provide an excellent mechanism to get dollars from point A to point B. For companies using the YourCause products, CSRconnect and GrantsConnect, the Blackbaud Giving Fund is the DAF in use behind the scenes.

As the Executive Director of the Blackbaud Giving Fund, I have found that there’s a bit of a gap in the industry around understanding DAFs and in general, what options exist for companies to process the donations from their giving programs.

We prioritize creating a better DAF experience for corporations, their employees, and nonprofits.

Benefits of a Donor-Advised Fund for corporations, their employees and nonprofits

Disbursing quickly, regardless of the donation amount.

Corporate Social Responsibility program managers should expect quick disbursement of funds. Employees want immediate results when they make a donation, so you want to ensure the DAF you utilize is delivering donations quickly. Make sure to confirm your DAF does not have minimum donation threshold or holding policies around criteria like check vs. ACH distribution.

Creating confidence and reliability in our stringent vetting process.

Through our work with Blackbaud’s Anti-Money Laundering Compliance department and a network of Global Partners, we’ve created a massive database of nonprofits around the world. We know that in today’s risk-mitigation mindset, ensuring due diligence is key. We take the eligibility of nonprofits seriously so that our donors have peace of mind in knowing their dollars are going to reputable organizations.

What to look for in a DAF provider

There are a lot of DAF providers, more every day. Make sure your provider:

1. Vigorously manages eligible charities and grants – managing risk is critical.

2. Encourages donors and nonprofits to connect – we are about doing good and should facilitate it.

3. Has the capacity to serve your granting needs. It is easy to have a slick front end. The difficult and important work is in supporting the overall execution of your CSR program.

In our upcoming webinar on Tuesday, July 12th, my goal is to help provide clarity on some of the following topics:

• Why is leveraging a DAF the best way to get funds to charities?

• The benefits of using a DAF- for companies, the employees participating in the giving programs, and ultimately the charities who are the beneficiaries of these donations.

• The value of the Blackbaud Giving Fund and Blackbaud’s partnership.

About the Blackbaud Giving Fund

The Blackbaud Giving Fund is a nonprofit organization that powers philanthropy by connecting donors and charities. Through our partnership with Blackbaud who provides technology and program services, we manage a donor-advised fund to securely and efficiently receive donations from donors and deliver grants to charities making an impact around the world. Our charitable giving model focuses on the needs of donors and charities which allows us to maximize the impact of charitable giving.