How to thank donors who use donor-advised funds

Donors who support your organization using donor-advised funds (DAFs) can bolster your organization’s work through unrestricted funding. Some may become major donors, or set up recurring grant recommendations to support your organization. Seventy nine percent of Fidelity Charitable donors also say they volunteer their time to charity.¹ A personalized thank-you letter is an opportunity to cultivate a new relationship and share the work of your nonprofit with someone who has committed funds in advance for their charitable giving.

You can acknowledge their generosity in much the same way you thank your other donors—with just a few differences.

Thank the donor who recommended the grant, not Fidelity Charitable

The grant you received was from Fidelity Charitable, but the reason you received it was because a donor recommended a grant to your organization—therefore, be sure to thank the recommending donor, and not Fidelity Charitable. Contact information, if provided by the recommending donor, will be on the grant detail report you received with your grant. Need help finding the donor contact information that came with your grant?

This same advice applies to all of your marketing and fundraising materials. Make sure you aren’t sending magazines or any other collateral to Fidelity Charitable. Mail cannot be forwarded on to the recommending donor.

Eliminate all references to the gift being tax-deductible

If you have a template that you use to thank your donors, there’s an important change you’ll need to make for donors who use donor-advised funds. A donor who recommends a grant from a donor-advised fund is not eligible to claim a tax deduction in connection to the grant. That’s because donors are eligible to claim a charitable tax deduction when they make a contribution to a DAF- sponsoring organization, like Fidelity Charitable, not when their grant recommendations are distributed to charities like yours.

As you write the letter or email, note that you received the gift via a donor-advised fund. Make sure you remove any reference that suggests that the donor is eligible to claim a tax deduction in connection to the donation. Restating that the donation is not tax-deductible as well can help avoid confusion. It can be as simple as: “Remember, this is not a tax receipt. You may be eligible to claim a tax deduction for your contribution to the organization that sponsors your donor-advised fund.”

Use a thank-you as an opportunity to drive future engagement

DAF donors have specifically committed funds for charitable giving to nonprofits like yours by establishing a donor-advised fund, so they are strong candidates for further engagement. You might consider inviting them to tour your facility or to attend a program or event. Or you could offer a personal call about the work your nonprofit does if you aren’t located in the same area as your donor. You may also want to personalize your thank-you note with a handwritten message.

Help the donor see the impact of their support

As with any other donor thank-you, restating your organization’s mission and describing how the donor’s support will help drive toward your organization’s goals is always a best practice! Give examples of recent accomplishments and upcoming projects. Donor-advised fund donors, like any other donors, are invested in seeing you succeed and meet your goals, so consider listing some plans for future work as well.

Get started with a template

Once you’ve followed these steps to craft a DAF-specific gift acknowledgment, consider creating a thank-you template to streamline the process in the future. Below is an example thank-you template for donors who use donor-advised funds. Feel free to download as is or edit to make it your own.

¹Fidelity Charitable, Time and Money: The Role of Volunteering in Philanthropy, 2014.