Donor-advised funds, explained for small nonprofits (and DAF Day is October 8)
A check arrives from Fidelity Charitable with a stranger's name on it, or no name at all. Here is what happened, what it means for your thank-you letter, and the one sentence your donate page is missing.
What a donor-advised fund is
A donor-advised fund is a charitable account. The donor puts cash or stock into it, takes the tax deduction that year, and the money sits inside a public charity called a sponsoring organization. The IRS puts it this way: a DAF is "a separately identified fund or account that is maintained and operated by a section 501(c)(3) organization, which is called a sponsoring organization." Once the contribution is made, "the organization has legal control over it." The donor keeps "advisory privileges" over where it goes.
Source: IRS, "Donor-advised funds," irs.gov/charities-non-profits/charitable-organizations/donor-advised-funds.
The sponsors you will see on checks are the national ones attached to brokerages, Fidelity Charitable, DAFgiving360 (the new name of Schwab Charitable since 2024), and Vanguard Charitable, and the community foundations, which in greater Pasadena means the Pasadena Community Foundation and the California Community Foundation. The 2025 count is 1,512 sponsors nationally: 103 national, 803 community foundations, 606 single-issue charities.
Sources: DAF Research Collaborative, Annual DAF Report 2025 (updated analysis, spring 2026), dafresearchcollaborative.org/research/annual-daf-report; Charles Schwab press release, July 23, 2024, on the Schwab Charitable rename, pressroom.aboutschwab.com.
How a grant reaches you
The donor logs in, finds your organization by name or EIN, types an amount, picks what to share with you (name and address, the fund's name only, or nothing), and submits. The sponsor confirms you are a 501(c)(3) in good standing and cuts the check or sends the ACH. The letter says "recommended by" because that is the legal situation. The donor recommends. The sponsor grants. The money became the sponsor's the moment it went in.
So the gift belongs in your database as a gift from Fidelity Charitable, with a soft credit to the person. Record it as a hard gift from the person and your receipts will be wrong. More on that below.
How big this is
In fiscal 2024, DAF sponsors granted $64.60 billion to charities, up 17.9 percent in a year. Donors put $90.57 billion in. Assets in DAF accounts stood at $327.87 billion. The report counts 3.59 million accounts and a payout rate of 25.2 percent. For nearly two decades National Philanthropic Trust published this report; starting with the 2025 edition the DAF Research Collaborative produces it independently, using NPT's licensed historical data. At one sponsor alone, DAFgiving360's donors recommended more than $6.6 billion in grants to 141,000 charities in its fiscal 2024.
Sources: DAF Research Collaborative, Annual DAF Report 2025, dafresearchcollaborative.org/research/annual-daf-report; National Philanthropic Trust, The 2024 DAF Report (fiscal 2023 data: $54.77 billion in grants), nptrust.org/reports/the-2024-daf-report; Charles Schwab press release, July 23, 2024, pressroom.aboutschwab.com.
The point for a small organization is simpler than the billions. Some of your donors hold one of these accounts, and when they give from it, the check does not come from them.
Why the grant arrives with no name on it
Three cases. First, the donor chose to be anonymous. This is rarer than the folklore says: Fidelity Charitable reports that 4 percent of its grants are anonymous and 95 percent include information about the donor, and Vanguard Charitable says 4 percent of its grants are completely anonymous. Second, the donor shared only the fund's name, "The Nakamura Family Fund," with no address. Third, the donor shared everything and the letter with their name on it is in a folder behind the bookkeeper's desk, unread. Check the third before you assume the first.
Sources: Fidelity Charitable, nonprofit FAQ, fidelitycharitable.org/nonprofits/nonprofits-frequently-asked-questions.html; Fidelity Charitable, "For Nonprofits," fidelitycharitable.org/nonprofits.html; Vanguard Charitable, "Nonprofit organizations," vanguardcharitable.org/nonprofit-organizations.
What you can do about it
Read the transmittal letter that came with the check. Acknowledge the sponsor in writing; Vanguard Charitable asks that "acknowledgment of the gift goes to Vanguard Charitable." If you have the donor's name, thank the donor. Fidelity Charitable's own advice: "Thank the donor who recommended the grant, not Fidelity Charitable." If you have a fund name and nothing else, Vanguard says the donor "does not wish to receive an acknowledgment for that specific grant," and Fidelity runs a nonprofit help line (800-952-4438, option 4) for locating donor information that came with a grant.
Then fix the front end. Fidelity tells nonprofits to "make sure your tax ID number is visible on your website" and to make sure the name you do business as "matches the name you have registered with the IRS so it's easy for donors to find you." A donor searching for "Pasadena Youth Chorus" inside a sponsor's portal will not find "Foothill Music Education Inc." Put both names and the EIN on the donate page, and ask, in the same breath, that they include their name.
Sources: Fidelity Charitable, "How to thank donors who use donor-advised funds," fidelitycharitable.org/articles/how-to-thank-donors-who-use-donor-advised-funds.html; Fidelity Charitable, "For Nonprofits," fidelitycharitable.org/nonprofits.html; Vanguard Charitable, "Nonprofit organizations," vanguardcharitable.org/nonprofit-organizations.
Your letter is a thank-you, not a tax receipt
The deduction happened when the donor put money into the fund. IRS Publication 526 covers the contribution to the DAF, and requires the donor to hold "a contemporaneous written acknowledgment from that sponsoring organization that it has exclusive legal control over the assets contributed." That acknowledgment came from the sponsor. Nothing deductible happens when the grant reaches you. Fidelity states it flatly: "A donor who recommends a grant from a donor-advised fund is not eligible to claim a tax deduction in connection to the grant." Vanguard: "You shouldn't send the tax receipt to the donor, because they've already received one from us when they made their initial contribution."
So drop the "no goods or services were provided" paragraph and the deductible amount from the donor's letter. Write what happened: "Thank you for recommending a $500 grant from your fund at Fidelity Charitable, which we received on October 9." Fidelity suggests adding one line to head off confusion: "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." Then tell them what the money did.
Sources: IRS Publication 526, Charitable Contributions, irs.gov/publications/p526; Fidelity Charitable, "How to thank donors who use donor-advised funds," fidelitycharitable.org/articles/how-to-thank-donors-who-use-donor-advised-funds.html; Vanguard Charitable, "Nonprofit organizations," vanguardcharitable.org/nonprofit-organizations.
DAF Day is Thursday, October 8
DAF Day calls itself "the national giving day for donor-advised funds." It falls on the second Thursday in October, which this year is October 8, 2026. It is run by Chariot, a company that sells DAF payment tools to nonprofits, which launched the day in 2024. Year two, October 9, 2025, drew 4,400 participating nonprofits and 30 DAF sponsors and moved a little over $2 million from just over 1,000 gifts. Against $64 billion a year, that is a prompt, and a modest one. It is useful anyway, because most small nonprofits never remind their DAF donors of anything.
What to do with it: email the DAF donors you already have, the week before, with one sentence. "If you give from your donor-advised fund this year, October 8 is DAF Day. Our legal name is X and our EIN is Y. Please ask your sponsor to include your name so we can thank you."
Sources: DAF Day, dafday.com; Chariot, "DAF Day Sees Exponential Growth in Year Two," givechariot.com.
The one-sentence fix for your donate page
Add this under the donate button, with your own names filled in:
Giving from a donor-advised fund? Our legal name is [Legal Name], EIN [XX-XXXXXXX]. Please tell your sponsor to include your name so we can thank you.
Legal name, EIN, "tell your sponsor." That is the whole fix, and it answers the only three questions a DAF donor has at the moment of giving.
The move
Before October 8: search your database for Fidelity Charitable, DAFgiving360 (and its old name, Schwab Charitable), Vanguard Charitable, and every community foundation that has ever sent you a check. Soft-credit the person on each gift. Put the sentence above on the donate page. Send the list one email. When the grants come in, write thank-you letters and pull the tax language out of them.
Three questions people ask
Is a DAF grant tax-deductible for the donor?
Not at the grant stage. The deduction was taken when the money went into the fund, and the sponsor issued that receipt.
The letter shows a fund name and no address. What now?
Record the gift from the sponsor with a soft credit to the fund name, and acknowledge the sponsor. Vanguard Charitable says a donor who shares only a fund name does not want an acknowledgment for that grant. Fidelity's nonprofit line can help with a Fidelity grant. Then ask every donor, on the donate page and in every appeal, to include their name.
Do we have to sign up with the sponsors to receive grants?
No. The sponsor checks that you are a 501(c)(3) public charity in good standing with the IRS and sends the grant. What helps is a public name that matches the IRS record and an EIN on your site.