Grantmaking from donor-advised funds (DAFs) is up — and it's up enormously. At National Philanthropic Trust, our grant dollars doubled in 2020. Other DAF sponsors reported a similar pattern. What is it about DAF donors that makes them respond so robustly to a crisis? And is this pattern of giving sustainable?

Here are three important lessons we learned about DAF donors in 2020 and why they should matter to nonprofits in the coming years:

1. DAF donors mobilize quickly. Americans have always had a giving impulse; they want to help in the face of challenges such as natural disasters, community emergencies, and neighbors in need. Giving in 2020 was marked with a different kind of urgency and qualifies as the most widespread and sustained form of "disaster giving" I've witnessed over more than four decades working in philanthropy.

2. DAF donors are committed to the long-term viability of nonprofits. DAF donors are committed philanthropists. We see this in the grants they recommend. In the aggregate, DAF grant dollars have increased nearly 100 percent in the last five years. We also see it in the payout rate from DAFs. Grant payout, which is a function of how much donors grant from their DAFs relative to total assets, has been above 20 percent for the last fifteen-plus years. This means DAF donors give generously and consistently — across economic cycles, election cycles, and in the face of great challenges.

3. DAF donors are "AND type people." DAF donors don’t look at their philanthropy through an either/or lens. They don’t choose either their longstanding favorite charity or a new one; they tend to support both. They don't have to choose either giving today or leaving a legacy tomorrow, they recommend grants now and invest for more grantmaking later. This year has highlighted exactly how important flexibility in philanthropy can be. Instead of making trade-offs, our donors recommended more grants — by volume and dollar value — in every interest area.

Read the full article about donor-advised funds by Eileen Heisman at Philanthropy News Digest.