App Boosts Donor Advised Fund Participation Revenue

United Way of Rhode Island (UWRI) has had donor-advised funds (DAF) available for more than 20 years. But there was little or no movement in total giving or in the number of donor accounts during the past five years, according to Sandi Connors, executive vice president and director of strategic marketing and communication.

UWRI revamped the DAF as MyFund about 18 months ago and launched a mobile app and online portal ahead of its 2017 campaign. The approximately 225 current users can manage their donations like a checking account, with tools and resources to research and give to any charity in the country, according to President and CEO Cortney Nicolato.

MyFund rolled out during last year’s campaign and saw an increase of more than 16 percent in total giving. She credits the enhancement of the longtime DAF as one factor in the overall increase in support over the last two fiscal years. “As a result of the launch last year, we have seen a spike in donors leveraging donor- advised funds,” Nicolato said.

In the first year of MyFund, total giving to the DAF increased by almost $730,000, from $4.405 million to more than $5.134 million. Donations to the Providence, R.I.-based UW affiliate via DAF accounts also increased, almost $20,000 from $437,238 to $465,122, or about 6.4 percent. The overall number of DAF accounts saw a similar increase of about 6.4 percent, from 658 to 700.

UWRI ranks within the top 40 United Way affiliates nationwide when it comes to fundraising, consistently grossing in the neighborhood of $17 million to $18 million the last several years.

“When we created the app, our was hope was creating solutions that allowed broader audiences to use DAF-like features. We wanted to make it more available to a broader audience. It really has done that,” Nicolato said. “We wanted it to be a philanthropic checking account,” she said. “We wanted to make philanthropy easy but we also wanted to make it mobile and present,” she said. “I did my end-of-year donations the other day and it took five minutes.”

What’s really powerful, Nicolato said, is that MyFund is free for organizations or individuals to have an account. The minimum initial donation requires $1,000 and the minimum gift is $25, compared with commercial DAFs that have minimums as high as $25,000 and $500, respectively. People can do all their giving in one place and get one tax receipt, Nicolato said, adding that a longtime endowment covers administrative costs.

The knock on some DAFs, particularly those sponsored by commercial brokers like Fidelity or Schwab, is that donations might sit in accounts rather than promptly being paid out to charities. While commercial DAFs potentially could grow through interest or dividends if donations sit, MyFund donations do not.

Inactivity of more than a year for a MyFund account could result in funds being swept into UWRI’s community impact fund. Inactivity though can create an opportunity to talk to donors, Nicolato said, noting that she’s been making daily calls lately to remind folks. In most cases, she said the gentle reminder helps donors get the ball rolling on their yearend giving.

About 20 percent of users are active throughout the year, Nicolato said, and as people get used to the tool that number has grown. Others use the portal at designated times of the year or maybe twice annually. Funds move “pretty quickly,” especially this time of year, she said. Future enhancements of MyFund will allow United Way to aggregate data, look at trends and micro-target content around areas of interest for users, Nicolato said.