Donor Advised Funds (DAFs) have become one of the fastest-growing vehicles for philanthropy in Canada (see Part One of this series). DAFs are typically managed by a public foundation and offer donors a streamlined way to give, enabling contributions of cash, securities, or other assets. Donors receive immediate charitable tax receipts from the foundation and retain advisory privileges to recommend grants over time. While this model remains popular, recent years have seen a shift in how DAFs are used and perceived—paving the way for innovation and social impact.
The rise of donor peer groups
As philanthropy becomes less about individual giving and more about collective impact, many donors are seeking opportunities to connect, collaborate and learn from each other. Peer groups and giving circles, have allowed donors to pool knowledge, share leading practices, and even coordinate grant-making strategies.
Several organizations have created spaces for donors to participate in shared experience and thematic learning groups—whether focused on climate action, youth empowerment, reconciliation with Indigenous communities or other causes. By coming together, donors can increase the efficacy of their
giving, build a sense of community and foster innovation through shared insights.
Examples include:
It’s worth noting that many of these conveners operate based on a membership fee and do not offer a DAF. Very few DAF providers offer donor peer groups, likely due to the administrative burden of coordinating such an initiative for thousands of fundholders.
Trust-based philanthropy: shifting the power dynamic
Another trend reshaping DAFs in Canada is the move toward trust-based philanthropy. Traditionally, grant-making has often involved rigorous application processes, reporting requirements and significant oversight by donors or foundations. However, there is a growing recognition that such processes can create undue burdens for charitable organizations and reinforce imbalanced power dynamics.
Trust-based philanthropy turns this model upside-down. Instead of imposing strict requirements, donors are encouraged to build open, transparent and mutually respectful relationships with grantees. This includes offering multi-year, unrestricted funding, streamlining paperwork and prioritizing the needs and expertise of the organizations being supported.
Several foundations offering DAFs now actively promote trust-based approaches. The Vancouver Foundation, for instance, has made a commitment to grant more unrestricted funds and reduce administrative requirements, empowering charities to direct resources where they are needed most. Such practices have been shown to create deeper impact, foster innovation and build resilience in the nonprofit sector—especially as organizations navigate complex social and economic challenges.
Trust-based philanthropy is not without its challenges. It requires a willingness among donors to relinquish some control and a readiness to trust that charities are best-positioned to address the needs they face on the ground. As more donors embrace this approach, it is hoped the Canadian philanthropic ecosystem will become more equitable and responsive.
Activating capital for greater impact
A third emerging trend is the push to activate invested capital more effectively within the foundations that offer DAFs. Traditionally, these assets have been invested in conservative portfolios and distributed slowly over time. In recent years, however, there has been mounting criticism of DAFs for "warehousing wealth"—with significant assets sitting idle, sometimes for years, before being granted out.
In response, both donors and the staff at foundations offering DAFs are seeking ways to put capital to work more dynamically, including impact investing.
The Global Impact Investing Network (GIIN) defines impact investing as investments made with the intention to generate positive, measurable social or environmental impact alongside a financial return. Some foundations offering DAFs enable fundholders to deploy funds from DAFs into foundation-selected impact investing funds. For example, several Community Foundations have launched initiatives to help fundholders explore investments in affordable housing, renewable energy, and social infrastructure.
However, the vast majority of private and public foundations are reluctant to engage in impact investing. First, there is a lack of understanding about impact investing and a persistent belief that all returns are concessionary. Earlier this year, SVX reported on the returns of 82 impact investments and found 64% delivered above-market or at-market returns. Second, in 2022, the Canadian government introduced legislative changes under Bill C-19, shifting from a strict “direction and control” model to a more flexible “resource accountability framework”. The shift was in response to criticism that “direction and control” was administratively burdensome, inequitable and inconsistent with international norms. However, many believe the new “resource accountability framework” does not address these criticisms and blame government for a lack of guidance to interpret the rules.
A more collaborative, responsive landscape
The Canadian DAF sector is at an inflection point. As donors experiment with new models of collaboration, build trust-based relationships with grantees, and activate mission-aligned capital, DAFs are evolving beyond passive investment vehicles to become engines of innovation and impact.
While challenges remain—such as ensuring transparency, measuring outcomes and balancing donor intent with community needs—the sector’s willingness to embrace new approaches bodes well for the future.
By tapping into the power of peer networks, fostering trust, and leveraging capital for additional benefit, Canadian DAFs are poised to play a pivotal role in building a more equitable, vibrant and resilient society.
Arundel Gibson MBA, MFA-P is a Client Consultant at Cidel Asset Management. Arundel joined Cidel in 2023 and is responsible for serving Cidel’s private clients. She brings over twenty years of experience in leadership roles at corporate and not-for-profit entities. Prior to Cidel, she led Canadian philanthropic advisory services for a multinational, professional services firm’s family office operations. agibson@cidel.com
Eric Saarvala MBA, G. Dipl. SR&S, CSR-P, is Head of Corporate Sustainability, Raymond James Ltd., and Executive Director of the Raymond James Canada Foundation. Eric brings over 25 years of consulting and management experience in social impact through sustainability, corporate social responsibility (CSR) and strategic philanthropy in the private, public and non-profit sectors. Eric.Saarvala@raymondjames.ca
