More than twelve months into the COVID-19 pandemic, many nonprofit organizations are still struggling to recover. However, DAF donors stepped up, sometimes making large and critical grants to support their favorite charities and others that addressed essential needs in the spring and summer. Gifts through Donor-Advised Funds (DAFs) increased by more than 29 percent in the first half of 2020, in large part due to intensified philanthropic engagement around the pandemic.

DAFs have become an essential tool for donors to respond to crises, as seen by the significant increases in grants from DAFs during the first part of the pandemic. 

Why DAFs Are Ideal in a Crisis

DAF Donors Can Mobilize Quickly

DAF accounts can deliver a swift impact to provide a life-saving ring to nonprofit organizations serving those hardest hit by the pandemic with funds already in place. In addition, the ability to recommend grants quickly has made an enormous difference in donors’ philanthropic response and their willingness to support more causes than ever before.

For example, DAF donors rallied quickly to help the National Christian Foundation, a member of TrustBridge Global’s network, raise more than $82,000 in a few short weeks to support India’s overwhelming COVID crisis. With thousands of new cases reported every day, TrustBridge Global assisted by ensuring the efficient distribution of donations to charitable organizations on the ground with clearly defined budgets and plans.

DAF Donors are Committed to Long-Term Nonprofit Viability

DAF donors are committed philanthropists who give generously and consistently, especially in the face of extraordinary challenges. Their long-term commitment is also apparent by their willingness to plan recurring grants—monthly, quarterly, or annually—to their favorite organizations.

 DAF Donors Reject Either/Or Philosophy

Rather than choose either their long standing favorite charity or a new one, they tend to support both if a need arises. In addition, they demonstrate openness to supporting new charities and increasing their grant dollar in the face of new challenges.  

The pandemic has heightened our awareness that circumstances can quickly plunge people into desperate conditions, and crises don’t recognize borders. In other words, help is desperately needed around the world. Cross-border charitable giving can be complicated. Even when our hearts are in the right place, steps must be taken to ensure due diligence is completed before cross-border donors contribute.

DAFs Are An Excellent Mechanism for Cross-Border Giving

Many options facilitate global giving—funding intermediaries, “Friends-of” organizations, or private foundations—however, establishing a donor-advised fund (DAF) is one of the best options. A DAF offers an immediate tax-deductibility of the contribution to the fund (depending on the philanthropic rules in the donor’s country) and provides administrative convenience. 

Although many DAFs administer international contributions, TrustBridge Global DAF’s offer unique qualities that enable donors to establish a centralized charitable account. That means that donors can make a generous contribution, receive an immediate tax deduction, and then recommend grants from the fund over time. Thus, a TrustBridge Global DAF acts as a charitable savings account. 

DAF Costs

Because TrustBridge Global is structured as a charity that sponsors a DAF program, there are no fees. Instead, it shares the cost of operating the foundation among the DAFs equitably, with assessments made against amounts already held within the foundation, not paid separately as a fee might be.

That provides significant cost savings. For example, a $50,000 international gift through CAF and Global Giving would charge a five percent fee (Global Giving charges a fee of 12 percent on the first $5,000 contribution, five percent for US or UK charities). However, the same gift would only require a one percent operating costs assessed by TrustBridge Global. 

TrustBridge Global can help you understand the complexities of cross-border giving and ensure that more of your donations flow to the corners of the globe where they are most needed. 

Although the vaccine roll-outs offer a glimmer of hope, the long-term effects will not subside anytime soon, even as virus infections continue to fall. Access to testing and vaccines isn’t readily available to many of the most vulnerable, and new variants continue to emerge. Unfortunately, needs will continue to outpace every dollar imaginable, and philanthropy will continue to be called upon to support the pandemic’s economic, social, and health impacts.