Intent + Action = Impact: The Essential DAF Formula

What if I told you that, right now, there is more than enough philanthropic funding available to reduce suffering on a global scale?

In fact, these funds could save tens of millions of lives, end child hunger, deliver clean water to every community, and radically transform the trajectory of global health care coverage. Wouldn’t you question why we aren’t putting those dollars to work this instant?

These are not funds that we would need to pull from some other budget – they’re already promised to nonprofits.

Over a quarter of a trillion dollars is currently set aside to address charitable causes like health crises, poverty, food insecurity, educational barriers, and more – funds that would have a transformational impact over generations. That money is waiting in financial institutions, community foundations, and grantmaking organizations – it just requires one final step from the donors: action.

I’m talking about donor-advised funds – or DAFs.

As a seasoned fundraiser and member of Project HOPE’s Leadership & Legacy Giving team, DAFs are one of my favorite topics to discuss with donors. And on this DAF Day, I celebrate the incredible potential of this giving tool while inviting DAF donors to take action during a year of unprecedented need.

Donor-advised funds are a major topic in charitable giving today – but they weren’t always as popular.

Originally built as a tax tool for high-net-worth philanthropists, DAFs later caught the attention of financial institutions, which recognized them as a way to grow invested assets – and a source of revenue. Beginning in the 1990s, banks and investment firms have made them far more accessible with fewer fees and minimums required. The result: millions of Americans now hold accounts containing billions earmarked for charitable giving.

But here’s the tricky part: those dollars don’t automatically flow to nonprofits. Donors receive the tax benefit right away, while the actual grants only happen when the donor later chooses to initiate them. Year over year, less than a quarter of DAF assets get paid out to charities. In other words, hundreds of billions of dollars continue to sit idle without delivering any philanthropic impact. What does it mean when generosity is promised but not delivered to communities who need it now?

DAFs are only rising in popularity. The question isn’t whether they will remain, it’s whether we will use them the way they’re meant to be used – as charitable spending accounts.

People open donor-advised funds for many reasons – a financial advisor’s recommendation, legacy planning, to start a tradition of family giving, and more. And donors have motives for holding on to them too. In my 12 years of fundraising, I’ve heard it all: those who were hesitant because of market uncertainty, others who were advised to open one but never fully understood it, and some who wanted to see the fund grow before giving – although invested assets can also shrink depending on market fluctuations. I even worked with one individual who admitted he “just kept forgetting” about his $2 million account, year after year.

Every reason is okay. We all have our own journey with philanthropy. When taken together, though, these pauses ladder up into something bigger. What feels like a singular choice collectively becomes a clog in the flow of giving — $251 billion sitting still while urgent needs grow.

And in 2025, the needs are radical. With government resources and international aid receding, communities are relying on private philanthropy to fill urgent voids. At Project HOPE, our ability to close the health access gap and support families during disasters and humanitarian crises is dependent on the flexibility and availability of our funding. A grant today can keep our health clinics operational, provide lifesaving maternal care, or nourish a starving child. Earlier this year, private donations kept our clinics in Gaza open in the face of immediate aid cuts that would have threatened 315,000 innocent children, pregnant women, and families’ access to medical care, clean water, and protection amidst catastrophic conditions. The same grant a year from now might have come too late.

The evidence is clear – when DAFs are activated, lives are changed.

So what’s next? It doesn’t take much to act. Here are some tips to maximize your DAF impact:

• Contact your DAF sponsor to initiate grant recommendations.
• Give directly through a charity’s website using tools like Project HOPE’s DAF Pay, which lets you complete your donation in three quick steps.
• Review your sponsor’s year-end deadlines to ensure your gift reaches its destination in time.
• Consider starting your 2025 grants before December 1 to beat the rush of holiday giving.
• Connect with your gift officer or general contact to ask any questions you might have.
• Create a personal DAF activation plan to guide short-term giving and consider naming charitable beneficiaries for long-term legacy planning.

Imagine the ripple effect if even an additional 10% of idle DAF dollars were put into action this year – it would mean $25 billion dollars that could have lifesaving implications for millions around the globe. What’s missing is not capital, but commitment.

All DAFs share the same end goal: to be used for good. At its core, philanthropy is the best of us — the impulse to act, to provide for others what we never had, to make the world a little brighter and better. In the darkest times, philanthropy can be the hope we bring into the world, and the choice we make to forge a better path.

Donors have already set this money aside – but generosity doesn’t live in an account statement. This DAF Day, I invite every donor to ask: “What’s stopping me from moving these dollars now?” Because intent doesn’t save lives. Action does.

This article was written by Project HOPE's Caitlin McCarthy