April 9, 2013 | Read Time: 3 minutes
Charities can now make it easier for donors to make gifts from donor-advised funds by using a simple application on the nonprofits’ Web site.
Donor-advised funds allow people to establish a charitable account, get an immediate tax deduction, and help decide later which charities receive grants. Until now, donors have had to go through the fund to make a gift, and none of the funds have allowed charities to communicate directly with their account holders.
But using this application, or “widget,” donors can give directly to the charity.
Here’s how it works: Charities post a badge bearing the widget, which is called DAF Direct, on their Web site’s donation page, along with other options for online giving. Donors use a pull-down menu to select the donor-advised fund, then fill in the amount and purpose of the gift and click the “next” button to get to the donor-advised fund site. The application automatically transfers the information to that site, and the donor can completes the gift with a few clicks.
The application was created by Fidelity Charitable, the nation’s largest commercially sponsored donor-advised fund, in collaboration with other donor-advised funds and 10 charities that have piloted the application.
The widget has been in the pilot phase for the past few months, but starting today it’s available to all qualified charitable organizations.
Currently only people who have donor-advised funds with Fidelity or Schwab Charitable, the second largest commercial fund, can use the DAF Direct widget, but Fidelity officials said they are expanding the application so it can be used with donor-advised funds at community foundations and other entities.
The DAF Direct application should be welcome news to fundraisers, many of whom have complained about how hard it is to get grants from donor-advised funds, which hold billions of dollars of charitable assets. Many donors make anonymous gifts from their accounts, so it is hard to find out who they are, and commercial donor-advised funds don’t accept grant proposals.
“We have been really pleased with our partnership with DAF Direct so far,” said Anne Marie Borrego, director of media relations at the American Red Cross, which participated in the pilot phase. “We started working with them last summer and have definitely seen donations.” She said she was not authorized to disclose how many gifts the widget had generated or their average size.
Another participant in the pilot phase, the Pan-Mass Challenge, a bike-athon that raises money to support the Dana-Farber Cancer Institute, has used the widget since January. Of the 59 people who have made donor-advised-fund gifts so far this year, 22 used DAF Direct, said David Hellman, the event’s senior vice president for operations. The average gift made with the widget was $373.
“At $373, the average gift is less than the overall average DAF gift (last year around $1,000), but it is still much higher than the average credit-card gift of $120 or gift by check of $240,” Mr. Hellman said in an e-mail. “And DAF gifts carry no credit-card overhead.”
Charities can learn more about using the DAF Direct widget on their Web sites at www.dafdirect.org.
