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

Originally published on Foundant

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 grant makers 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. Seek a meaningful connection at your local community foundation:

A foundation program officer’s attention is on the nonprofit organizations that a foundation may decide to fund. Likewise, a donor services officer’s attention is on the donors that choose to establish a donor-advised fund at the foundation. A donor services officer is responsible to assist the donor in executing grants out of their donor-advised fund. Some donors may have already decided on a set list of organizations that they wish to support. However some other donors might be open to supporting new causes, and may look to their donor services officer to identify and recommend organizations that match to their interests.

How can your nonprofit be on the radar of a donor services officer who might recommend your organization to a donor? First, by continuing good communication with the foundation program officers you already have relationships with. Donor service officers seeking to learn about nonprofits are most likely to start by asking their colleagues on the front lines of nonprofit grant making.

You can attempt making direct contact with a donor services officer. We advise approaching a donor services officer with a simple, respectful email that requests a brief phone or video call to introduce your organization. If the call is granted, prepare a succinct presentation that shares your mission, your organization’s response to the crisis, and why your work is likely to compel the attention of donors interested in your cause. Unless the donor services officer seems to be shutting down the conversation, you may even request permission to follow-up with a brief (1 – 2 pages) overview report, in hopes he or she may share with donors.

Keep in mind that as with anything in fundraising and grant seeking, there are no guarantees. Be grateful for any time and assistance you may receive from a donor services officer. Their primary responsibility is to serving the interests of their donors, not to responding to the needs of nonprofits. That said, as long as you are respectful and appreciative, you can make the attempt to try.

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.

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