Pocket Tools and Purpose

Dr. Bruce Wilkinson and his wife Darlene were looking for a way to give more freely to those in need. 1 Timothy 6:18, “ready to give, willing to share” was the catalyst for them as they developed the “God pocket” concept. They committed an amount of money, put it in their pocket, and waited for a “nudge” from God to give to someone in need. This commitment in advance gave them the freedom to act. “When God signals, we can respond…” he says. In his book, The God Pocket, Dr. Wilkinson explains the concept is simple: [God] owns it. You carry it.” 

That is really what a donor advised fund (DAF) is: a sophisticated “God pocket”. When families utilize a DAF as a tool for their giving, they make commitment to be generous in advance. They are discerning where God desires them give. Whether given quickly or saved for a rainy day, they are giving with purpose, and the DAF is their tool to make this possible.  

The DAF is philanthropy’s largest growing giving vehicle. Between 2015 and 2018, the number of DAFs increased by 273%. In 2018, DAFs accounted for 13% of all individual giving. The average gift, or grant, from a DAF is nearly $5,000. In times of crisis and downturn, DAF donors have historically stepped up. Early data indicates that will remain true in the 2020 COVID-19 crisis. According to Nonprofit Quarterly, gifts from DAFs in March and April increased.       

As DAFs grow in popularity, it is important nonprofit leaders are confident in their knowledge and best practices. Here are some things to consider:  

1. DAF donors are people. When you interact with a DAF fund-holder, you are talking to a person that represents a family, not an institution. They are generous and want to see an impact today. They like to volunteer and are long-term thinkers. They often engage in charitable decisions together as a family, not in isolation.  

2. Demonstrate impact. Donors want to know what good has been accomplished. Make sure you have a system set up to report back the results of a particular project or campaign to DAF donors. This builds trust and confidence in your organization that leads to future investment. Share stories and connect the dots to the particular lives impacted. 

3. Interact appropriately. Set up a process to handle gifts from DAFs. Since the funds are technically given from the DAF sponsor organization and only directed by the donor, operational procedures should be established for interaction.  

• • Appreciation. Thank donors for their gift. If you have contact information for your donor, and most likely you will, as less than 5% of DAF gifts are given anonymously, thank them directly and report impact. However,  you do not need to receipt them. The donor has already received a tax receipt from the DAF sponsor organization when they made a contribution to their DAF. You can still send a letter of acknowledgment to the donor.
     
  • Relationship. Build relationships with donors just as you would with any mid-level or major donor. Do not allow the DAF platform and process to deprioritize your relationship with a donor. Recognize the potential and develop a relationship.  
      
  • Recognition. Ensure you soft-credit or otherwise recognize the donor within your CRM system. If you do not have a method to credit the donor, although not officially, in your internal system, they may be left off major donor searches, key communication distribution lists, etc. Put a system in place to be certain a valuable donor utilizing a DAF is not forgotten.   

4. Position yourself. Ensure DAF holders know about you. Communicate that you accept DAF gifts. Update your  Guidestar-Candid profile. Build rapport with DAF sponsor organizations. Though they do not make grant-making decisions, awareness can be helpful as they do have interaction with donors.   
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What an opportunity to work with committed, generous donors! Remember to embrace DAFs as a tool that donors leverage for generosity. It is a delight to consider talking with donors who have already committed to giving and are leaning into the Lord’s leading to determine where to invest and partner charitably.  

DAF donors have established their “God pocket” and are ready to use it!