Scholarship Support Through Donor-Advised Funds (DAFs)

Donor-advised funds, or DAFs, are a vehicle for charitable giving that has typically been used by extremely affluent donors. But lower-cost DAF offerings are beginning to expand the reach of this unique giving structure—and that means more donors can make a bigger impact on students in need.  

Just what is a DAF? 

According to Fidelity Charitable, one of the largest DAF managers in the world, DAFs are the “fastest-growing charitable giving vehicle in the United States because they are one of the easiest and most tax-advantageous ways to give to charity.” Despite that rapid growth, however, the DAF sphere is currently concentrated among a small group of high-dollar supporters.  

The Chronicle of Philanthropy says:  

Today, DAFs are relatively rare — there are fewer than 2 million accounts — yet mighty, thanks to their collective $250 billion in assets, according to the National Philanthropic Trust. They are a giving vehicle that’s been embraced by the affluent. Donors to the Foundation for the Carolinas must make a contribution of at least $100,000 to open an account. At Fidelity Charitable, the nonprofit offshoot of the financial-services giant, funds average nearly $300,000 in assets, according to the organization’s latest tax filing. 

DAFs are poised to grow. 

The Chronicle goes on to examine how DAF managers, advisors and fund administrators are working to bring these powerful charitable giving tools to a wider audience. Efforts include:  

• Large DAF providers are eliminating minimum contributions to open DAF accounts.  

• Significant community foundations (such as those in Atlanta, Chicago and Kansas City) are no longer requiring minimum initial investments, meaning younger investors can give strategically even without generational wealth. 

• Workplace giving programs like Benevity and the Blackbaud Giving Fund are making DAFs part of their workplace and peer-to-peer campaigns, and startups such as Daffy and CharityVest are offering low-cost DAFs and encouraging individuals to make recurring contributions. 

 As quoted in the Chronicle, Daffy co-founder Adam Nash says, “Most of the people who give to charity regularly are going to end up with a separate account for charity. And it’s very likely going to be a donor-advised fund.” 

And Scholarship America’s chief growth officer, Abigail Seldin, confirmed to the Chronicle that our student supporters are making DAF gifts of all sizes, saying “Since 2019, we’ve received more than 2,000 gifts through donor-advised funds. And those gifts range in size from $5 to $100,000.” 

If you’re an investor or donor who thought DAF funding was out of reach for your budget and goals, now is the time to explore new options.  

It’s easy to support students through your DAF. 

Through your DAF, family foundation, or direct giving, you can support existing scholarship programs, emergency aid programs, or work with Scholarship America’s team of experts to design a new scholarship program and determine eligibility criteria. 

With $5 billion in distributions to students since 1958, we are the leading administrator of private scholarships in the United States. Our senior scholarship advisors combine best-in-class administration with our 501(c)(3) mission to build programs aligned to the goals and values of our sponsors – and to drive impact for students. 

Selecting Scholarship America as a beneficiary of your DAF means:  

• Leveraging our six decades of experience to determine the right solution. We are nationally recognized experts in managing funds to support high-achieving students with financial need. 

• Working with a Scholarship Advisor to assess how you can make a targeted impact: We can design a scholarship program that reflects your priorities and meets student needs at any institution— all supported by your DAF.  

• Tailoring your support to the needs you care about: we’ll work with you to scope, create, and manage a fully compliant program that can support students at four-year schools, community colleges or career schools. 

• Not interested in creating a new program?  Scholarship America is a full-service partner, and your support can also help us expand existing high-impact scholarships or emergency aid funds. 

To learn more, download this case study that outlines how Scholarship America worked with a Minnesota couple with two goals: providing scholarships to students from their hometown, and funding students who want to pursue careers in health care. The program we created together is now celebrating its 10th year of supporting students. 

No matter what your chosen audience or investment vehicle may be, we’re ready to work with you to do good.