Donor-Advised Funds (DAFs) are the fastest-growing giving vehicle in Canada, and their rise has sparked both interest and debate. With misconceptions and concerns surrounding DAFs, it is crucial to provide accessible, practical information that encourages understanding and informed decision-making. This is precisely the goal of a new suite of five practical resources released by Canadian Association of Gift Planners (CAGP) last week.
Developed by CAGP’s DAF Working Group, a group of over 30 professionals passionate about DAFs and the opportunities they provide for charitable giving, and funded by the CAGP Foundation, Empowering Philanthropy: An Overview of Donor-Advised Funds is a comprehensive guide on the DAF environment and is accompanied by four companion pieces for donors, charities, financial professionals and DAF foundations.
DAFs are growing in popularity for several compelling reasons
They offer donors a highly flexible approach to philanthropy, and donors can make contributions to their DAF at any time, receive immediate tax benefits and then recommend grants to charities over months or even years. This flexibility allows donors to align their giving with their personal values and financial planning strategies while supporting causes that matter most to them. Furthermore, DAFs simplify the administrative burden of charitable giving by consolidating multiple donations and providing professional management of funds. This convenience, combined with the ability to maintain some influence over grant-making, makes DAFs an attractive option for individuals and families seeking impactful ways to give.
Another reason for their growth is their accessibility. Many financial institutions and foundations now market DAFs, making them available to a broader audience of donors. As more people learn about DAFs, their appeal continues to expand. However, along with this growth comes the need for greater understanding of how DAFs operate and their role within the philanthropic ecosystem. Charities remain concerned about the inability to properly steward and thank donors, particularly when DAFs use anonymous naming. The resources developed by the CAGP Foundation aim to offer clear, actionable insights for donors, charities, financial professionals, and DAF-holding foundations.
(A recent three-part series by Eric Saarvala and Arundel Gibson also explored these evolving dynamics, offering valuable perspectives on the future of DAFs in Canada.)
These resources are not just about understanding DAFs; they are about fostering collaboration, enhancing transparency and building a stronger philanthropic community. Whether you are a charity, a professional advisor, or a foundation, taking the time to explore these materials will help you to better navigate the complexities of DAFs and use them to create meaningful change. As DAFs continue to reshape the philanthropic landscape, these tools are essential for maximizing their potential and building a more equitable and impactful future, something core to CAGP’s mission.
Download the DAF resources here in English, or here in French.
Ruth MacKenzie is President & CEO, CAGP & Executive Director, CAGP Foundation.
