Emergency Grants from Donor-Advised Funds: What Nonprofits Should Do During the COVID-19 Crisis

To protect and secure grant revenues during the COVID-19 crisis, the most important first step that nonprofits should take is communicating with existing grant funders. Our advice is to contact current grantmakers as soon as possible to share your organization’s challenges and needs in the crisis. You can ask for flexibility about how you spend any active grants and even request emergency grant funding.
 
But what else can organizations do as part of their disaster fundraising plan? What if you have already communicated with your current grant funders? What if your nonprofit is not currently receiving grants?
 
Your nonprofit coronavirus response should not overlook grants from Donor-Advised Funds (DAFs). DAFs are a powerful potential source of crisis grants for your organization. That’s because experience shows that during economic downturns, giving through DAFs remains strong. 
 
Whereas some donors who give out of pocket might hesitate to give if their jobs or investments feel uncertain, individuals with a donor-advised fund already invested that money into their DAF prior to the crisis. Now, those funds are available and ready to be allocated in the form of grants to organizations.
 
Now is an important time to pay attention to the benefits of DAFs for your organization. We recommend three steps that nonprofit leaders can take to make the most of grants from donor-advised funds, now and after the COVID-19 crisis:
  1. Understand the essentials about donor-advised funds: Donor-advised funds are one of the fastest-growing charitable giving vehicles in the US. In 2018 alone, donors recommended grants totaling $23.42 billion to charities from their DAFs. If your organization is not proactively maximizing DAF gifts, you risk missing out on revenue. The first step to receiving grants from donor-advised funds is educating yourself. Read the complete Grants Plus Guide to Donor-Advised Funds for a comprehensive understanding of what DAFs are and what your organization should do to maximize this growing source of support.
  2. Connect with DAF donors that have supported your organization before: Hopefully, you have already been spotting DAF gifts that you’ve received and appropriately soft crediting them in your database. Unless a DAF donor has explicitly requested that you not contact them, you should include them in your donor communications and steward them as you do other major donors. Now is an important moment to share a personalized update. Gather a list of donors who’ve given to your organization through DAFs in the past few years. Create a letter that explains how the crisis has impacted or influenced your programming, operations, staff, and the clients, students, or audiences you serve. Express how grateful you are for their previous support and how much you need and would appreciate additional support now. Donors want to help, so give them the opportunity to do so by directing an emergency grant through their donor-advised fund.
  3. Contact the DAF Donor Services Officer at your local community foundation. Ask if there is an opportunity to place your organization’s needs before DAF holders at their institution. If they are willing to do so, provide a brief report (no more than a page or two) that can be shared with their DAF donors. The report should introduce your organization, its mission, and impact, as well as explain how your organization is proactively helping to address the needs of the community during the crisis. If the foundation officer has a DAF donor whose values and giving priorities align to your organization’s mission, they might be willing to suggest the donor give your organization a look.
Above all, it is crucial that nonprofit leaders not stop engaging with donors and seeking funds. Cultivating relationships with donors who give through donor-advised funds should be part of your COVID-19 crisis fundraising plan. Grants Plus is here to help. If you have questions and concerns about how the crisis is impacting your nonprofit grants effort, contact us to request a complimentary troubleshooting conversation with one of our experts.

About the Author

Lauren Steiner

Lauren is President and Founder of the professional grantseeking firm Grants Plus. Since 2007, the team at Grants Plus has partnered with nonprofit organizations across the country to secure more than $155 million in grant funding from public and private sources. Learn more at https://grantsplus.com/.

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