Myth busting Donor-Advised Funds: setting the record straight

Donor‑advised funds (DAFs) continue to grow in popularity and use in the UK. What’s less widely known is that the structure and concept have existed in the charity sector for over 50 years. Despite this, knowledge of DAFs remains relatively low across the sector, and myths continue to circulate in charity folklore.

Inspired by the What is a DAF anyway? webinar, hosted by bee advisory with speakers from CAF and Cancer Research UK, this is the first in a three-part series on donor-advised funds.

In part one we debunk some of the myths related to giving through DAFs and explore the implications for fundraising strategy and practice.

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Debunking the myths: true or false?

1. Charities can fundraise from DAFs: False

The simplest way to understand this is to look at the name: donor‑advised funds. This means the named account holder recommends which charities to support, how much to give, and when.

Unlike a charitable trust or foundation, charities can’t formally apply to a DAF for funding and the DAF providers don’t decide where the money goes (though they do carry out important due diligence checks on the charity recipient). Approaching a DAF as though it were a grant‑making body is unlikely to be productive and risks misdirecting valuable time and resource.

However, this doesn’t mean charities can’t meaningfully steward gifts made through DAFs or build strong relationships with DAF providers. When your organisation receives a gift via a DAF, steward it as you would any major donation: ask the provider to pass on a thank‑you letter, share invitations to learn more about your work, and always provide impact reporting.

2. DAFs replace relationships with donors: False

Fundraisers know that successful fundraising is built on relationships. In most cases, significant donors don’t appear out of nowhere—they have a connection to the organisation, its leadership, or its work.

That said, not all donors want—or have the time—to engage deeply with every organisation they support. Some are happy to give and trust the charity to use the funds well. These preferences don’t change simply because a donor uses a DAF to administer their giving.

DAFs don’t remove the donor relationship. If anything, they can add another layer of insight. Building a good relationship with a contact at the DAF provider can help you better understand a donor’s motivations, interests, and preferred ways of engaging—and provide a useful sounding board for different engagement opportunities.

The fundamentals remain the same: build authentic relationships, understand how donors want to engage, and continue to communicate your impact. It’s entirely normal for those preferences to evolve over time as individual’s businesses, lives and philanthropic goals shift. Keen to bolster your relationship management practices? I offer a range of consultancy options from training to strategy to support with this.

3. Smaller charities benefit less from DAF giving: False

There’s no evidence to suggest that smaller charities don’t benefit from giving from DAFs in the same way as larger organisations, albeit in relative terms due to smaller organisational budgets and scale of work. Because donors are in the driving seat with their donations, whether through a DAF or through making a straightforward gift, they decide which organisations inspire them based on their connection and motivation – rather than being influenced by the DAF provider.

Of course, small charities don’t always have the luxury of being able to employ a fundraiser, so ensuring finance teams, CEOs and senior leadership teams are aware of how to work with DAFs is important.

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So, what is a DAF anyway?

A donor‑advised fund is a charitable giving account set up under the umbrella of a DAF provider, which is itself a registered charity. The fund is named by the donor, and it’s common to see DAFs referred to as “trusts” in name.

The role of the DAF provider is to facilitate giving—making it efficient and straightforward by handling administration such as due diligence, compliance checks, and grant processing. This allows donors to focus on their values and the impact they want to have, rather than the mechanics of giving.

DAFs are a growing part of the UK’s broader philanthropic ecosystem and giving from DAFs to charities is worth an estimated £650 million a year. While they are most commonly used by individuals and families, they are also used to administer corporate giving, legacies, and, in some cases, the giving of trusts and foundations.

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Final thoughts

Donor advised funds aren’t a passing trend, nor do they require charities to reinvent their fundraising approach, just a nod to changes in the wider philanthropic landscape.

For charities, the opportunity lies not in “cracking” DAFs, but in continuing to do the fundamentals well: building relationships, communicating impact, and stewarding donors thoughtfully—regardless of the vehicle they use to give.

At bee advisory, I work with charities and funders to help navigate exactly these kinds of shifts in philanthropy, ensuring fundraising strategies remain grounded, effective, and relationship‑led. I've led philanthropy teams and worked for a DAF, so I bring a cross-sector approach and grounded knowledge in what works. If you’re thinking about how DAFs fit into your wider fundraising or major donor approach, would like a strategy MOT, or support with tackling challenges related to high value giving, please get in touch.

With thanks to Joe Crome, CAF, and Aneliese Chapman at Cancer Research UK for sharing their insights in the DAF webinar in late 2025.