Donor‑Advised Funds: A Major Opportunity for Catholic Parishes

Donor‑advised funds (DAFs) have quietly become one of the most powerful forces in American philanthropy and interestingly, and one of the most misunderstood. For Catholic parishes, schools, and cemeteries, DAFs represent a massive opportunity to strengthen ministry, support mission, and connect with donors who want their giving to reflect their faith.

But to seize that opportunity, we first need to understand what’s happening. That's why we're featuring this as a topic as part there in our series on building long-term financial stability in our local parishes.

DAFs Are Growing Faster Than Any Other Giving Vehicle

I recently attended an Association of Fundraising Professionals Minnesota panel on Giving USA’s 2026 annual report. Panelist Maggie McCracken Vice President, Philanthropic Strategy & Engagement from the Minneapolis Foundation shared staggering statistics: “There are three and a half million donor‑advised funds in the country, and they hold $325 billion in assets.”

Three and a half million accounts; Three hundred twenty-five billion dollars set aside for good but untapped.

And that number is already outdated because that was Giving USA’s summary of 2025 numbers. DAFs continue to grow every single year.

Most DAF Dollars Are Sitting Idle at Commercial Providers

Even more striking is where these funds live: “Ninety percent of the three and a half million are at commercial providers… More than 70% of the assets are at the national providers,” Maggie explained.

This means the vast majority of DAF dollars are sitting at places like Fidelity Charitable, Schwab Charitable, Vanguard Charitable and the National Philanthropic Trust. Yes, these institutions are excellent at investment management, but they are not mission‑driven, not Catholic, and not connected to the needs of Southern Minnesota parishes.

And because donors can watch their DAF balances grow (even though the money has already been given away for tax purposes), many donors unintentionally treat their DAF like a second investment account instead of a charitable tool.

As Maggie noted: “You talk about it like you’ve given it away – almost. [So I ask people] How can we support you in doing that more?” DAFs are meant to be granted out, but nationally, payout rates remain uneven — meaning billions intended for charity are not yet reaching ministries.

Where the Church Fits In

With this landscape in mind, the question becomes: how can Catholic parishes tap into this growing pool of charitable dollars? Now that we know DAFs are a powerful giving vehicle today and will continue to grow in their potential for positive impact, we need to look at how the Church fits into this picture.

I see two things for us to ask ourselves as parish leaders:

1. For our parishioners who already have a DAF, have you asked them to consider giving to your parish through it?
2. For our parishioners who may have a need for a tax write off, have you shared about the option of using a DAF as a tool to give to your parish?

Behind Every DAF Is a Donor Who Wants to Give

One of the most important reminders from Maggie on the panel was this: “Behind every donor‑advised fund is an individual giver.”

DAFs are not faceless accounts. They are generous people often looking for meaningful, values‑aligned opportunities. They simply need a clear invitation. People who simply need guidance, connection, and confidence that their giving will make a meaningful impact.

Accessing the funds we know are sitting in donor advised funds might just be as simple as

1. Are you telling your parish stories well?
2. Are you asking for the funds?

Take Action to Inspire DAF Giving with Thoughtful Storytelling

This is where Catholic organizations have a unique advantage. We exist to bring Christ’s hope to Southern Minnesota! So, I know for a fact that you have stories to tell! “I’m not a communications person,” you said. I say, it doesn’t matter. And it doesn’t matter if you are a parish staff member or just a dedicated parishioner. Here are a few ways to get started with better story telling which will ultimately inspire more giving.

• People want to hear from people. Be yourself. Think: How would you tell your neighbor about the good things happening in your parish?
• Tell a brief story about a ministry success. People respond when they see real impact. A brief example followed by an invitation to support that work can encourage parishioners to recommend a DAF grant.
• Use multiple communication channels. Ask your pastor to include a short update in the bulletin, announcements, your website, social media, or email newsletter.
• Frame giving as participation in a shared mission. “Our parish thrives because we build it together. Your gift, whether through a DAF or another method, helps us serve families, celebrate the sacraments, and care for those in need.”
• Provide choices instead of a single path. Let parishioners decide what resonates with them: online giving, a DAF grant, the building fund, or a legacy gift to the endowment.

As we explored in our recent blog about generational giving differences, each generation gives for different reasons, so we want to be sure our parish communications are addressing ALL of our parishioners needs not just communicating the same way we always have been.

• Millennials & Gen Z crave engagement, transparency, and visible impact before giving; they respond to mission, not maintenance.
• Gen X values clarity, competence, and practical impact.
• Boomers and the Silent Generation give out of trust, identity, and long standing commitment

               Dig in deeper to ideas for telling your impact stories well in our other blogs:

               How to Update Your Parish on Endowment Progress

               How Transparency Transformed a Roof Appeal into a $240,000 Success

 

Take Action to Create New DAF Gift Sources

The other side of the coin is simply asking for funding. You can do this in a number of ways and it doesn’t have to be awkward or abrasive.

Here is a polished, concise rewrite using your exact format but focused entirely on helping parishioners understand and begin using donor‑advised funds*. Each item includes one strong example and a clear “why it works” explanation. No repetition, no extra fluff — just actionable guidance.

1. Explain DAFs as a simple tax‑planning tool

Many parishioners have never heard of donor‑advised funds or do not realize they offer an immediate tax deduction.

“Some families open a donor‑advised fund in a higher‑income year. They receive the tax benefit right away and then recommend grants to the parish over time.”

Why it works: It gives parishioners a practical, relatable reason to consider a DAF without sounding technical or pushy.

2. Share one clear, real‑life example

People understand DAFs best through stories, not definitions.

“One parishioner opened a DAF after selling farmland. The tax deduction helped in that year, and the family now recommends grants to their parish whenever a need arises.”

Why it works: A single, concrete example helps parishioners see how a DAF fits into real life and real faith.

3. Offer an annual reminder about giving options

A brief bulletin note or announcement can introduce DAFs as one of several ways to support the parish.

“If you are planning your charitable giving for the year, remember that you can give through cash, online giving, or a donor‑advised fund.”

Why it works: Regular reminders normalize DAFs and help parishioners remember they have more than one way to give.

4. Connect DAFs to mission, not mechanics

People are more open to new giving tools when they see how those tools strengthen ministry.

“A donor‑advised fund allows families to support the parish in a way that reflects their faith and their hopes for the future of our community.”

Why it works: It keeps the focus on mission, which is what motivates most Catholic donors.

5. Invite DAF giving during natural ministry moments

Pairing the message with a meaningful moment helps parishioners connect generosity with gratitude.

After a parish milestone: “If this celebration has blessed your family, consider recommending a grant from your donor‑advised fund to support the ministry that made it possible.”

Why it works: It feels timely, heartfelt, and spiritually grounded.

 

Community Foundations Are Built for This Moment

Because we know your ministries personally, we can match donor intent with parish needs far more effectively than national providers. Commercial DAF providers cannot offer:

• Mission alignment or Catholic values screening
• Local community knowledge
• Relationship‑based guidance
• Parish‑level impact stories

But the Catholic Foundation can.

Bringing the perspective of a Community Foundation to the panel, Maggie explained: “Our job is to help fund holders get more resources out into community… The more we can build a relationship and understand what’s happening in your organization, we can be a connector.”

This is exactly what the Catholic Foundation of Southern Minnesota does, but with the added benefit of Catholic‑values investing, local ministry expertise, and deep relationships with parishes across the diocese.

We’d love to hear about your project or ministry with us so we can help connect donors with missions they’re passionate about. For instance, I recently met with a leader from Worthington's free clinic as well as with a team working on bringing a Chesterton Academy to Rochester to learn why they do what they do and what kind of funding they need to bring their mission to life.

Why Parishes Should Care About DAFs

Bottomline is:

• DAFs are the fastest‑growing charitable vehicle in the country.
• Billions of dollars are waiting to be granted.
• Catholic donors want Catholic‑aligned giving options.
• Parishes often miss DAF gifts simply because they don’t ask.

Parishes that talk about DAFs regularly are better positioned to benefit from one of the largest philanthropic opportunities of our time.

How the Catholic Foundation Can Help

The Catholic Foundation offers:

• Catholic‑aligned donor‑advised funds
• Personalized donor guidance
• Mission‑driven investment management
• Support for parishes seeking DAF gifts
• Education for pastors, trustees, and finance councils

We help donors give faithfully and we help parishes receive the support they need.

If your parish would like to unlock more DAF giving or you wish to open a Catholic‑values DAF, we’re ready to help. Reach out anytime at info@catholicfsmn.org or 507-218-4098.

 

 

Quoted Expert: Maggie McCracken, Philanthropic Strategy & Engagement from the Minneapolis Foundation