By Craig DePole
A loyal donor has supported your organization for years. She’s engaged, she’s committed, and last year she made a gift through her donor-advised fund. A few weeks later, she receives an email from your organization. The subject line reads: “We’ve missed you.”
From her perspective, something doesn’t add up. She gave, she expected acknowledgment, and instead, she’s getting a re-engagement email. It’s a small moment with a big implication: somewhere between the gift and the inbox, her giving got lost.
This is happening more than most organizations realize. And in many cases, it’s happening even at organizations that believe they’ve handled donor-advised fund giving correctly. The gift was received and recorded under the DAF sponsor. But because her gift lives, in the best cases, as a soft credit, the fact that she gave may be invisible to the reporting and segmentation tools most nonprofit fundraising systems use. Retention rates, average gift, donor counts—none of these metrics may fully acknowledge her engagement.
The donor-advised fund data problem is not just a gift-processing issue. It is a nonprofit reporting, donor retention, and stewardship problem. When DAF gifts are not connected clearly to the individual donor, your file tells an inaccurate story, and your leadership team makes strategic decisions based on numbers that don’t reflect reality.
And most of all, donors are left wondering if their gift ever arrived.
The Hidden Cost of Getting Donor-Advised Fund Data Wrong
Donor-advised funds, or DAFs, are one of the fastest-growing giving vehicles in philanthropy. Fidelity Charitable alone distributed a record $14.9 billion in grants in 2024, a 25% increase over the prior year. On top of that, DAF assets nationally have nearly doubled since 2020. For nonprofits, that growth represents real opportunity, but capturing it requires more than just accepting the gift. It requires your data infrastructure to actually see it.
The scale of what’s flowing through donor-advised funds makes this urgent. In 2024, 80% of Fidelity Charitable grants included the donor’s full name and mailing address. Only 5% were truly anonymous. The information is there. The question is whether your systems are set up to use it.
What Actually Goes Wrong With DAF Gift Processing
Most organizations assume their DAF data problem is behind them. They’ve set up a process, they’re acknowledging donors, and gifts are getting recorded.
It’s something our Director of Data & Analytics, Kari Beauclair, hears often, and she has a way of putting it to the test.
“I give specifically to organizations through DAFs just to see if they’re doing it right,” she says. “Only one out of five is.”
The breakdown usually happens in one of a few places. The gift arrives from Fidelity, Schwab, or another DAF sponsor and gets recorded under the sponsoring entity rather than connected to the individual donor. There is often no source coding to flag it as a DAF gift. No soft credit connects it back to the person who gave. In some cases, the credits get reversed entirely. The hard credit goes to the donor rather than the sponsoring entity, creating an IRS compliance risk because the charitable deduction legally belongs to the DAF sponsor, not the organization.
More often than not, organizations aren’t cutting corners. They’re working within systems that were never designed with donor-advised fund giving in mind. A soft credit gets applied, the donor gets thanked, and everyone moves on.
But the data problem doesn’t move on with them.
How DAF Data Errors Distort Your Fundraising Metrics
Here’s where the real damage shows up: file trend analysis and KPI reporting often run on transaction data, also known as hard credits. Soft credits, however carefully applied, don’t always get pulled automatically into donor retention reports, average gift calculations, or donor counts.
That means even a donor who is properly acknowledged and never receives a lapse notice can still be functionally invisible in your file analysis.
The downstream effects are significant. Sponsoring entities like Fidelity and Schwab accumulate hard credits year over year and start to look like your most loyal, highest-value donors. Your individual donors who give consistently through DAFs appear to be lapsed or disappear from your active file altogether. New donor counts get undercounted. Average gift figures get skewed. Retention rates become even harder to interpret accurately.
This isn’t happening in a vacuum. The sector saw its strongest revenue growth in five years in 2025. However, donor counts fell by an estimated 3.6%, extending a streak of year-over-year declines that started more than a decade ago. On top of that, donor retention has remained essentially flat, a trend that’s hard to meaningfully reverse when the donor base keeps shrinking.
With the data pointing to years of donor decline, making sound decisions about segmentation, channel investment, and donor development is hard enough. It’s even harder when your data quietly undercounts some of your most loyal givers.
What’s at Stake for Nonprofit Donor Retention and Stewardship
DAF donors are not a niche audience. They’re intentional, committed, and highly retained. Nearly 80% of DAF grants go to organizations donors have previously supported. These are your most loyal constituents, structuring their giving deliberately and choosing your organization specifically.
When your data infrastructure can’t see DAF donors clearly, the consequences go beyond a missed thank you.
Stewardship strategies are built on a false picture. Major donor prospects go uncultivated because they look lapsed. Segmentation decisions are made without accounting for a giving segment that’s growing at double digits year over year. And leadership teams find themselves in strategy conversations armed with trend data that doesn’t reflect what’s actually happening with their donor file.
But the flip side of that problem is a real opportunity.
“We can build a strategy around DAF donors and look at their giving characteristics as a separate audience from other donors,” says Kari.
It’s an opportunity we see with many of the clients we work with. But getting there starts with acknowledging how wide the gap is. And for most organizations, it’s wider than they realize.
Questions to Ask About Your DAF Data Process
A good place to start is asking a few honest questions about how your organization handles donor-advised fund data today:
- When a DAF gift arrives, do you know exactly how it gets processed and what gets recorded?
● Is it flagged as a DAF gift in a way that’s reportable?
● Is a soft credit or recognition credit connecting that gift back to the individual donor?
● Is that credit showing up in your retention and segmentation reporting, or just in selections?
● When you pull file trend data, are you confident you’re seeing individual donor behavior, or are you seeing entity behavior from sponsoring organizations?
If you found yourself saying “I’m not sure” more than once, that’s worth paying attention to. It’s a common gap, and one that’s fixable. It’s also exactly the kind of problem Newport ONE has been working on.
A Different Kind of DAF Data Partnership
Across animal welfare, environmental causes, human services, international relief, and beyond, we’ve seen firsthand how DAF data challenges play out and what it looks like when organizations get it right.
With a recent, intentional investment in analytics, including senior hires with deep experience in fundraising data, Newport ONE is positioned to help organizations do more than just accept donor-advised fund gifts.
The goal is to help clients build reporting and strategy for DAF donors as a distinct, high-value audience: understanding their giving characteristics, segmenting them appropriately, and communicating with them in ways that reflect what they actually know.
If you’re not sure where your organization stands on DAF data, or you suspect your file trends aren’t telling the full story, we’d love to talk. Reach out to our team to start the conversation at freshideas@newportone.com.
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FAQ’s: Donor-Advised Fund Data and Nonprofit Reporting
What is the donor-advised fund data problem?
The donor-advised fund data problem happens when a DAF gift is recorded under the sponsoring organization, but the individual donor’s relationship to the gift is not reflected clearly in reporting, segmentation, or retention analysis.
How do DAF gifts distort nonprofit donor retention metrics?
DAF gifts can distort retention metrics because many nonprofit systems rely on hard-credit transaction data. If the DAF sponsor receives the hard credit and the individual donor only receives a soft credit, that donor may appear lapsed or inactive in standard reporting.
Should a DAF gift be hard credited to the individual donor?
No, the hard credit for the gift must remain with the DAF sponsoring entity because the charitable deduction legally belongs to the DAF sponsor. The individual donor should typically be connected through a soft credit, recognition credit, or another reportable relationship in the database.
How can nonprofits improve DAF donor reporting?
Nonprofits can improve DAF donor reporting by flagging DAF gifts consistently, connecting each gift to the individual donor when donor information is available, ensuring soft credits flow into retention and segmentation reporting, and analyzing DAF donors as a distinct audience.
Why should nonprofits build a separate strategy for DAF donors?
DAF donors are often highly intentional, loyal, and valuable. Treating them as a distinct audience allows nonprofits to better understand their giving patterns, steward them appropriately, and make more accurate decisions about donor retention, major gift cultivation, and long-term revenue strategy.