Author Topic: Questions about charitable giving with DAF and matched donations  (Read 761 times)

crocheted_stache

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Questions about charitable giving with DAF and matched donations
« on: December 31, 2024, 09:21:10 PM »
It's the very end of the year, and my email has been whatever the email equivalent is of ringing off the hook with last-minute appeals and offers of matching donations that claim to double, triple, and quadruple whatever I contribute to various organizations.

I've been deleting this stuff because I already contributed to the ones I care about. This is my second full year of contributing to all but political activism* through my donor-advised fund, through which I couldn't cause a payment to show up inside 24 hours, anyway. Besides, I'm kind of tired of the sheer volume of it.**

My questions for other donors and especially anybody who has seen behind the curtain on the receiving end of donations:
  • How important is it that I pursue matches? I can catch the month-long ones and potentially the week-long ones, but it takes more attention than I'd prefer. Shorter is too short for both the DAF turnaround and for me getting to something when I'm busy. Should I bother to wait for these kinds of two-for-one deals? How important are matching campaigns to organizations' bottom lines? Do matching offers mostly meet their limits for larger organizations?
  • Is it likely that my DAF donation even gets counted toward a matching campaign? How would I know or help it to connect?
  • It seems like most organizations do not make the connection between a donation coming from the Crocheted Stache Fund and me as an individual who has donated in previous years, with the result that I end up a paper thank-you and a year's worth of email about, "We don't have a record of your donation." Do I need to contact each individual organization to tell them I'm me? Do I have something set up wrong?
  • For organizations that have both a 501(c)(3) arm and a 501(c)(4) arm*, how big a deal is it if I contribute (only) to the former?
  • Does every organization on the planet pester people to sign up as a monthly donor because they can convince more people to donate $10 per month than $120 per year, or does a monthly structure also make a real difference in their bottom lines? The DAF has a minimum grant, and also I'm curious what if any difference it makes.

*DAFs are basically a way to aggregate charitable contributions for tax planning purposes, so organizations need to be 501(c)(3) to be eligible to receive a grant from one. Anything actively supporting political campaigns isn't that. Some of the more savvy organizations divide their operations into a part for general advocacy, education, etc. (to which donations are tax-deductible) and another part for the kinds of political activities that are not tax-deductible.

** Note to anyone involved in fundraising: I'd much prefer an occasional (read: monthly, or maybe weekly if there's a lot going on) newsletter update about all the great things the organization is doing, and also here's a button/link to donate. Some organizations seem to veer into daily, breathless email that leads with how urgent my donation is, etc. Others, it feels like they're spending all of last year's donation on postage and printing to mail me more beg letters. </rant>

Catbert

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Re: Questions about charitable giving with DAF and matched donations
« Reply #1 on: January 01, 2025, 11:24:49 AM »
While I have no specific knowledge, I do have thoughts.  I've always figured that the matching fund appeals were just a gimmick and that the major matching donor was donating that way for good publicity.  It's also like the charity saying, "Today only, buy one, get one free".  I also ignore because I tend to donate early in the year and those appeals are often in December.

When I used a DAF I always used the anonymous option.  I slowly started receiving fewer donation requests.  Then last year I used QCDs and forgot to make it anonymous.  Yikes.  Everybody matched my name in their database with my address and started soliciting me hard.  Oh, and one (or all) of them sold my name to others.  Personally I would suggest making your donations anonymous if your DAF has that option.  Fidelity does, I assume others do also.

I think the $10 a month is better for the charity than a lump sum of $120, because the automatic monthly donation will continue until you take steps to stop it.  Just like any other subscription model that may be years later.

kenner

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Re: Questions about charitable giving with DAF and matched donations
« Reply #2 on: January 01, 2025, 07:06:50 PM »
I think the $10 a month is better for the charity than a lump sum of $120, because the automatic monthly donation will continue until you take steps to stop it.  Just like any other subscription model that may be years later.

Partly this, and partly that recurring monthly or quarterly donations help organizations with planning...if you know you're getting $X every month it's a lot cleaner to build a budget on (especially since most charities have their own set of fixed bills) than lump sums appearing at random, even if those lump sums are larger, because there's no guarantee when/if the next is coming.

bacchi

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Re: Questions about charitable giving with DAF and matched donations
« Reply #3 on: January 01, 2025, 09:24:47 PM »
My questions for other donors and especially anybody who has seen behind the curtain on the receiving end of donations:
  • It seems like most organizations do not make the connection between a donation coming from the Crocheted Stache Fund and me as an individual who has donated in previous years, with the result that I end up a paper thank-you and a year's worth of email about, "We don't have a record of your donation." Do I need to contact each individual organization to tell them I'm me? Do I have something set up wrong?

What are you trying to accomplish here? Like Catbert, all of my DAF donations are anonymous. (I hope they aren't snail mail spamming Fidelity.)

crocheted_stache

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Re: Questions about charitable giving with DAF and matched donations
« Reply #4 on: January 01, 2025, 09:59:22 PM »
My questions for other donors and especially anybody who has seen behind the curtain on the receiving end of donations:
  • It seems like most organizations do not make the connection between a donation coming from the Crocheted Stache Fund and me as an individual who has donated in previous years, with the result that I end up a paper thank-you and a year's worth of email about, "We don't have a record of your donation." Do I need to contact each individual organization to tell them I'm me? Do I have something set up wrong?

What are you trying to accomplish here? Like Catbert, all of my DAF donations are anonymous. (I hope they aren't snail mail spamming Fidelity.)
Mainly, I'm still trying to figure out how I want all this to operate, so your question is a good one to consider. I should at least move to this mode for the ones with communications or fundraising practices that annoy me. Some of the organizations I support are small and local, with people I know, and in those cases, I do want them to know it's me. Then again, those are not the ones that are bugging me.

I have had the occasional organization pop up that obviously got my name from one of the others. I just asked them to stop sending me stuff, and they did.

iris lily

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Re: Questions about charitable giving with DAF and matched donations
« Reply #5 on: January 02, 2025, 07:04:51 AM »
DAF is a Donor Advised Fund for those who can’t read acronyms.

I make no effort to catch matching periods.

Charitable giving will be an even bigger focus for me this year than in the past two years. Each of past two years we gave $20,000. This year I want to increase that to $30,000 but will have an uphill battle with DH because he likes to hoard money.

I am age 70.5 and can now remove money from my IRA to a qualified charity, one that is a 501c3.

I don’t get anonymous donations. It didn’t occurred to me. Most of my money goes to local organizations, and I have a personal relationship with some of the heads of those organizations. For one of them, I’m on the board.

« Last Edit: January 02, 2025, 06:14:41 PM by iris lily »

FireLane

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Re: Questions about charitable giving with DAF and matched donations
« Reply #6 on: January 04, 2025, 07:13:50 PM »
How important is it that I pursue matches? I can catch the month-long ones and potentially the week-long ones, but it takes more attention than I'd prefer. Shorter is too short for both the DAF turnaround and for me getting to something when I'm busy. Should I bother to wait for these kinds of two-for-one deals? How important are matching campaigns to organizations' bottom lines? Do matching offers mostly meet their limits for larger organizations?

I can't speak to how much these matching campaigns matter, but personally, I don't concern myself with it. Keeping track of when they're available sounds too much like work. I make donations when I have the time and when it seems good to me to do so.

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Is it likely that my DAF donation even gets counted toward a matching campaign? How would I know or help it to connect?

I know that for Fidelity Charitable, which is where I have my DAF, when you put in a donation to a charity, there's a line where you can specify its purpose - whether you want it to go to the organization's general fund, or whether you're contributing to a specific campaign, and if so, which one.

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It seems like most organizations do not make the connection between a donation coming from the Crocheted Stache Fund and me as an individual who has donated in previous years, with the result that I end up a paper thank-you and a year's worth of email about, "We don't have a record of your donation." Do I need to contact each individual organization to tell them I'm me? Do I have something set up wrong?

Again speaking for Fidelity, there's an option to label your DAF donation with your full name and address, or just the name of your giving fund, or stay anonymous. However, I can promise that they don't care about this. No large charitable organization is keeping personal track of each of their donors, and no one's feelings will be hurt if you don't donate.

You're just a name on a list to them. When they send out their regular solicitations, there's a computer algorithm that looks up your details and picks whether to send the "We missed you!" letter, or the "Keep up your giving streak!" letter.

As an anecdote: there are some charities I've supported for a long time. To this day, I get letters from those charities addressed to me, at my parents' address - where I haven't lived for almost twenty years - begging for more donations, even though I do donate to those charities from my current address. Whoever's running the charity's fundraising doesn't know or care that I'm the same individual who used to live at one address and now lives at another. Once a name + address pair is on their solicitation list, they never delete it.

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Does every organization on the planet pester people to sign up as a monthly donor because they can convince more people to donate $10 per month than $120 per year, or does a monthly structure also make a real difference in their bottom lines? The DAF has a minimum grant, and also I'm curious what if any difference it makes.

As others have said, it's probably easier for their budgeting if they get donations as a predictable income stream, rather than one-time donations that may come in at random times during the year.

However, there's also a "stickiness" that's attractive to them. People are lazy, and once you're signed up for a recurring donation, you'd have to actively decide to cancel it. Obviously, charities prefer that giving, rather than not giving, is the path of least resistance.