Donor Advised Funds: A New Challenge for Nonprofit Fundraising?

DAFs are a relatively new creature, a creation of Wall Street, and while DAFs attract large dollars, they almost certainly siphon dollars from NPOs that legitimately need the cash.  In a profile in the The American Prospect, it is revealed that a Wall Street DAF tops the Chronicle of Philanthropy's newly released annual list of the nation's top grossing charities.  

The winner?  Fidelity Investments' Fidelity Charitable, which raised $4.6 Billion in 2015 alone, $900 Million more than the second place fundraiser. 

Now The Chronicle of Philanthropy’s newly released annual list of the nation’s top-grossing charities threatens to give the sector yet another black eye. Released on October 27, the report does contain some feel-good news about American generosity—overall giving is up by 7 percent, for example. But the ranking contains a startling revelation that could intensify scrutiny of the sector: The growth in what some have dubbed a “Wall Street takeover” of charity.
The report is sure to add plenty of fuel to an already heated debate about so-called donor-advised funds, a philanthropic vehicle that has been popularized by the financial industry. Known as DAFs, the funds function like charitable checking accounts, permitting donors to put money aside for philanthropic purposes, take an immediate tax break, and then “advise” the sponsoring institution on which charitable causes they want to support with that cash. Their exploding financial-sector use means that the nation’s most popular charity in terms of donated dollars is no longer a group like the Red Cross or the Boys & Girls Club of America, but rather Fidelity Charitable, a DAF sponsor created in 1991 by the Boston-based financial firm.
Having raised $4.6 billion in 2015 alone, Fidelity Charitable occupies the number one spot on the Chronicle’s top charities list for the first time ever. The fund took in nearly $900 million more than second-place United Way Worldwide, which had until now held the top spot for all but one of the last 25 years. Two other sponsors of DAFs administered by financial firms—Schwab and Vanguard—also now crowd the ranks of the 15 largest U.S. fundraising organizations. Others that made the top 15 include Catholic Charities USA, the Salvation Army, and Stanford University.

Full story is here. 

Nonprofits Can Share Fundraising Duties

The lifeblood of Nonprofit Organizations (NPOs) is fundraising.  Fundraising is often a mysterious and daunting task for smaller NPOs, and in fact a whole industry has sprung up to service that need with professionals who can, for a fee, create and direct your NPOs fundraising strategy.  Now, a newer model emerges in NPO management circles that calls for spreading the fundraising responsibilities throughout the NPO staff - not just the development team.  

A good read on this topic can be had here