SAN FRANCISCO — David Risher, CEO of Worldreader, has a unique perspective on donor-advised funds.
When donors put money into a donor-advised fund, or DAF, they get a tax break without having to give that money to charity in the same year. Currently, over $120 billion is sitting in these accounts.
In June, the Rishers launched #HalfMyDAF to get DAF holders to commit to granting half of their DAF by Sept. 30. The effort builds on a message Risher shared on social media encouraging those who have given to DAFs to “finish the job.” The Rishers offered $1 million in the form of matching grants and invited other donors to join them in order to increase the matching pool.
As the COVID-19 pandemic forces many nonprofits to close their doors, #HalfMyDAF is one of several calls for DAF holders to give now, when the need is greatest. Risher said his experience on the fundraising side was what ultimately led to the launch of #HalfMyDAF.
“It was entirely because I’d spent so much time on the other side trying to solicit and put opportunities in front of people,” he said.
Many implementers do not have enough familiarity with DAFs to understand what an untapped fundraising opportunity they present, Risher said.
“If the job is to give money away, then do the job. Don’t get confused and think the job is to hold onto it for as long as possible,” Risher said.
In addition to targeting donors through #HalfMyDAF, the Rishers are offering advice for nonprofits on how to engage with DAFs.
If nonprofits go through their donor databases and see checks from institutions like Charles Schwab, Fidelity Investments, the Vanguard Group, or a community foundation, they are most likely from donor-advised funds, Risher said.
“Use some clues to figure out who your DAF holders are,” he said. “Then figure out who’s behind that.”
Nonprofits should try to figure out who the individuals behind these accounts are, as these donors have signaled an interest in the organization or the cause and may have greater capacity to give, Risher advised.
Sometimes, donors have a hard time deciding whether to dedicate their resources to immediate priorities or longer-term problems, he said. That can lead to a portfolio approach to giving, but it should not be an excuse to do nothing, he added.
“To me, the answer is always give now,” Risher said. “Solve the problems today, because those problems aren’t likely to get easier to solve over time.”
As of last week, #HalfMyDAF had mobilized $5 million in commitments to nonprofits. Risher acknowledged that $5 million is nowhere near the kind of momentum needed to get donors to spend down $120 billion in DAFs. But people told him this was exactly the nudge they needed, which convinced him that #HalfMyDAF should continue.
“If the job is to give money away, then do the job. Don’t get confused and think the job is to hold onto it for as long as possible.”— David Risher, CEO, Worldreader
“There are a lot of people who, given a little bit of a nudge, are willing to step up,” Risher said. “$5 million is great, but $120 billion is a lot, so then the question becomes: What do you do next?”
The Rishers are starting to strategize what the next campaign might look like. For example, they might ask donors to identify issue areas such as racial justice or climate change and come in alongside them with matching funds.
In the meantime, Risher said he wants to be very intentional about the tone he sets.
“It’s not a tone of ‘Eat your spinach,’ or ‘You need to be doing more,’” he said. “It’s really a tone of ‘Giving can be joyful if you get into it,” he said.