There Is $326 Billion Sitting in Donor-Advised Funds. Most Nonprofits Have No Strategy to Access It.

While nonprofits spent the past year scrambling to replace terminated federal grants, a pool of philanthropic capital larger than the entire NIH budget was sitting in financial accounts, waiting for someone to ask for it.

Donor-advised funds held $326.45 billion in assets at the end of fiscal year 2024 — a 27.5 percent increase from the prior year. Contributions into DAFs surged 37.3 percent to $89.64 billion. Grants flowing out of DAFs to nonprofits reached $64.89 billion, a 19 percent increase. There are now 3.56 million DAF accounts across 1,485 sponsors in the United States.

These numbers describe the fastest-growing segment of American philanthropy, and they describe a segment that most nonprofits have no deliberate strategy to access.

This gap between available capital and organizational capacity is not new. But it has become urgent. As federal grant terminations ripple through the nonprofit sector — 85 percent of organizations report some impact from funding changes, and 51 percent have lost government funding outright — the need for alternative revenue sources has shifted from strategic planning exercise to survival imperative. And the single largest alternative sits in DAF accounts at Fidelity, Schwab, Vanguard, and community foundations across the country.

What DAFs Actually Are — and Why They Matter Now

A donor-advised fund is, at its simplest, a charitable savings account. A donor contributes cash, securities, or other assets to a sponsoring organization — typically a financial services firm or a community foundation — and takes an immediate tax deduction. The funds are then invested and grow tax-free. The donor can recommend grants to qualified nonprofits at any time, in any amount, with no deadline.

That last point is critical. Unlike foundation grants, which follow structured solicitation and review cycles, DAF distributions happen at the donor's discretion. There are no RFPs, no review panels, no scoring rubrics. A donor with $500,000 in a Fidelity Charitable account can recommend a $50,000 grant to your organization on a Tuesday afternoon, and the check arrives within days.

This informality is simultaneously the DAF's greatest advantage and the reason most nonprofits struggle to access DAF dollars. There is no application to submit. There is no program officer to call. The entire pipeline depends on the donor knowing your organization exists, trusting your work, and deciding to recommend a grant. For nonprofits accustomed to federal grant processes — where success depends on writing skill, compliance capacity, and institutional track record — the DAF world operates on fundamentally different principles.

The Concentration Problem

Understanding who controls DAF dollars is essential to any access strategy. The landscape is concentrated in ways that create both opportunity and challenge.

Three types of sponsors manage DAF accounts: national sponsors (financial services firms like Fidelity Charitable, Schwab Charitable, and Vanguard Charitable), community foundations, and single-issue charities. National sponsors represent just 3 percent of all DAF sponsors but control 70 percent of all DAF assets, take in 73 percent of all contributions, and distribute 61 percent of all grant dollars.

Fidelity Charitable alone distributed $14.9 billion in grants in 2024 — a 25 percent increase year-over-year — to more than 213,000 unique nonprofits. That single institution moved more money to nonprofits than most federal agencies.

The concentration at national sponsors means that the majority of DAF dollars are held by donors who chose Fidelity, Schwab, or Vanguard because they already had investment accounts there. These donors are typically affluent individuals and families — the median DAF account size across the industry is $91,611, but accounts at national sponsors tend to be significantly larger. They give through their DAF because it is administratively simple, tax-efficient, and integrated with their broader financial life.

Community foundations present a different profile. Their DAF accounts tend to be smaller, their donors tend to be more locally focused, and their staff often play an active role in connecting donors with local nonprofits. For smaller organizations with strong community ties, community foundation DAFs may represent the most accessible entry point.

The Payout Rate Debate

One number that dominates the DAF conversation is the payout rate — the percentage of assets distributed as grants in a given year. In fiscal year 2024, the aggregate payout rate was 25.3 percent, up 1.3 percentage points from the prior year. This means that roughly three-quarters of DAF assets remain invested rather than flowing to nonprofits.

Critics argue that this is too low — that donors are warehousing tax-deductible dollars in investment accounts rather than putting them to charitable use. The One Big Beautiful Bill Act, signed into law in 2025, introduced new provisions affecting charitable deductions that may change DAF behavior over time. The law creates a permanent above-the-line deduction of $1,000 for individuals ($2,000 for joint filers) who take the standard deduction, but imposes a 0.5 percent AGI floor on itemized charitable deductions — a change that may push more donors toward DAF "bunching" strategies.

But for nonprofits seeking funding, the payout rate debate is largely irrelevant to strategy. What matters is that $64.89 billion flowed out of DAFs to nonprofits in 2024, and that number is growing at 19 percent annually. The practical question is not whether DAFs distribute enough — it is whether your organization is positioned to receive any of what they distribute.

Building a DAF Access Strategy

The organizations that consistently receive DAF grants are not simply lucky. They have built systems — sometimes deliberately, sometimes organically — that make it easy for DAF holders to find them, trust them, and give to them.

Make your organization DAF-friendly. This starts with basics that many nonprofits overlook. Is your organization listed correctly in every major DAF sponsor's search directory? Fidelity Charitable, Schwab Charitable, and Vanguard Charitable all maintain searchable databases of nonprofits. Donors use these databases to identify and verify organizations before recommending grants. If your organization is missing, has incorrect information, or lacks a compelling description, you are invisible to millions of potential donors.

Verify your organization's listing on each platform. Update your mission description, impact metrics, and contact information. Add your EIN, website URL, and any available financial transparency ratings. This takes an afternoon and costs nothing.

Identify your existing DAF donors. Many nonprofits already receive DAF grants without realizing it. Check your donation records for grants from Fidelity Charitable, Schwab Charitable, National Philanthropic Trust, Silicon Valley Community Foundation, or any community foundation in your region. These are DAF distributions. The donors behind them chose your organization once — which means they are likely to give again if you cultivate the relationship.

Contact each DAF sponsor's grants team and request information about past grants to your organization. Some sponsors will share this; others will not. But building even a partial picture of your DAF donor base is essential to any retention strategy.

Communicate in the language DAF donors understand. DAF holders are, by definition, financially literate individuals who have consciously structured their giving for tax efficiency. They respond to impact data, financial transparency, and strategic clarity — not emotional appeals or crisis-driven urgency.

Your annual report, website, and donor communications should speak to outcomes, not just needs. How many people did your program serve? What changed as a result? How do your costs compare to peer organizations? DAF donors are accustomed to evaluating investments. Give them the information they need to evaluate you.

Create giving pathways that match DAF mechanics. DAF donors can distribute any amount at any time, but they tend to give in patterns. Many make end-of-year grants in November and December. Others give quarterly. Some make a single large grant each year. Understanding these patterns — even at an aggregate level — helps you time your outreach effectively.

Consider creating a named fund or designated giving opportunity that DAF donors can contribute to over time. Multi-year pledges are common in DAF giving, and donors appreciate being able to plan their distributions in advance.

Leverage community foundations. If your organization serves a specific geographic area, your local community foundation is a direct pipeline to DAF dollars. Community foundation staff actively match donors with local nonprofits — a service that national sponsors do not provide. Many community foundations host donor events, publish grant reports, and maintain online giving portals that feature local organizations.

Building a relationship with your community foundation's donor services team costs nothing and creates a recurring channel for DAF distributions. Some community foundations also administer competitive grant programs funded by DAF holders — another access point worth pursuing.

The Non-Cash Giving Opportunity

One of the fastest-growing trends in DAF contributions is non-cash giving. At Fidelity Charitable, non-cash assets — appreciated stock, cryptocurrency, and other holdings — accounted for 67 percent of all contributions in 2024. Cryptocurrency donations alone increased by 177 percent year-over-year.

This matters because donors who contribute non-cash assets to their DAFs tend to be wealthier and more strategic in their giving. They are contributing assets that have appreciated significantly and using the DAF to avoid capital gains tax while claiming a charitable deduction. The resulting DAF balance is often large and the donor is actively looking for high-impact grant opportunities.

Nonprofits that can accept non-cash donations directly — particularly appreciated stock — create an additional reason for DAF-inclined donors to engage. Even if the donor ultimately gives through their DAF rather than directly, demonstrating that your organization understands non-cash giving signals sophistication and alignment with how these donors think about philanthropy.

The Strategic Shift

The growth of DAFs from $165 billion in 2020 to $326 billion in 2024 — a doubling in four years — describes a structural shift in American philanthropy, not a trend. The money is moving from government coffers and direct donations into intermediated accounts where donors maintain advisory control.

For nonprofits that have spent decades building capacity around federal grants — learning federal compliance, mastering SAM.gov registration, navigating Grants.gov, writing to scoring rubrics — the DAF world requires different skills. It requires marketing, relationship-building, donor cultivation, financial transparency, and the ability to communicate impact in ways that resonate with individual donors rather than government review panels.

This is not easy. But the scale of the opportunity is difficult to overstate. At $64.89 billion in annual distributions, DAFs already move more money to nonprofits than most individual federal agencies. And unlike federal grants, DAF distributions are not subject to continuing resolutions, political review, or DOGE terminations.

The organizations that build deliberate DAF strategies now — while the federal funding crisis forces the conversation — will be the ones that emerge with diversified, resilient revenue models. Tools like Granted can help nonprofits identify foundations and funding opportunities across the full landscape, including the community foundations that serve as critical access points to the growing pool of DAF capital.

The money is there. The question is whether your organization has made it possible for donors to find you.