Donor-Advised Funds: Are DAFs Eligible for Matching Gifts?
Donor-advised funds (DAF), which make giving charitable donations simple and easy, are quickly gaining popularity, but because nonprofits don’t know the ins and outs, they might not be fully taking advantage of them.
As a nonprofit professional, you likely know the DAF basics, such as how they allow donors to give today and receive a tax deduction now, rather than waiting for tax season. However, what if you could double these gifts through donors’ employers?
To fully answer this question, there are a few key points you need to review:
If you’re ready to boost your nonprofit’s revenue, let’s get started!
1. Typical Eligibility Requirements
All too often, nonprofits assume donor-advised funds are ineligible for corporate matches without even checking, which makes them miss out on vital fundraising opportunities. If your donors’ impact can potentially be doubled, why wouldn’t you look into it?
Nonprofit leaders who are unfamiliar with donor-advised funds often accept the donation for face value and don’t even consider that it might be eligible for a corporate match. While donor-advised funds aren’t always matched by employers, a lot of corporate giving programs do offer them!
As you’re probably already aware, matching gift guidelines vary by company. Some companies explicitly state their policies on donor-advised funds while others ignore the subject completely, even in their complete guidelines.
Companies without explicit guidelines in their corporate giving policy make the match process difficult for nonprofits and donors alike.
Let’s take a look at some major companies’ matching gift guidelines for charitable donations from donor-advised funds.
2. Corporate Examples
As your nonprofit starts incorporating donor-advised funds into its corporate giving strategy, it may be difficult to immediately recognize companies’ guidelines and restrictions surrounding these donations.
Take a look at the following examples of companies that directly address charitable gift funds. That way, you’ll know what to look for while researching your own donors’ employers.
Edwards Lifesciences matches donations up to $5,000 per full-time employee per year.
The company also is very clear in regards to their donor-advised fund (DAF) matching policy:
“Edwards Foundation will match the tax-deductible portion of employee’s gifts made by cash, check and credit card. The Foundation will also match stock donations, as well as gifts coming out of an employee’s donor-advised fund (DAF).“
Learn more about Edwards Lifesciences’ matching gift program.
American Express not only matches employee donations (sometimes at a 2:1 ratio), but they also have very explicit and detailed matching gift guidelines.
This simplifies the donor-advised match process for nonprofits, for its charitable employees, and for the company itself.
Here’s what the company’s match policy says about donor-advised funds:
What is eligible?
“Contributions out of a charitable-gift, donor-advised, community-foundation, or family fund to an eligible nonprofit distributed from an established fund set up by the employee in his or her name.”
What is not eligible?
“Contributions earmarked to an already established or to establish an employee’s charitable-gift, donor-advised, community-foundation, or family fund.”
Learn more about American Express’ matching gift program.
Dow Chemical offers a straightforward matching gift program that all employees and retirees can use to double their contributions to eligible nonprofits.
While Dow’s matching gift policy does have a few restrictions placed regarding the eligibility of certain organizations, matches that are eligible can range anywhere from $250 to $10,000, which can be matched at a 1:1 ratio.
Here’s what Dow Chemical’s guidelines say about giving from donor-advised funds and other charitable gift funds to eligible organizations:
“As long as the funds belong to a Dow employee/retiree and the funds are that person’s money alone, donations can be given through a donor-advised fund or other charitable gift fund. Employees/retirees will need to submit the matching gift form online after the donation has been made.”
Learn more about Dow’s matching gift program.
CarMax is regularly recognized for having one of the top corporate employee giving programs. The company not only matches employee donations, but it also matches donations from dependents until they turn 26.
The company will match up to $10,000 per associate per year. As with other well-designed giving programs, CarMax’s program encourages its employees to give back and strengthen the community.
When it comes to donor-advised funds, CarMax’s guidelines do have some restrictions regarding which gifts are eligible:
“Deferred gifts (annuities, charitable remainder trusts, etc.), bequests, insurance premiums that name the organization as a beneficiary, and gifts to and from donor-advised funds [are ineligible for a match].”
Learn more about CarMax’s matching gift program.
Bank of America
Bank of America matches donations to most 501(c)(3) organizations up to $5,000 annually per employee. The company also provides grants when retirees and employees volunteer.
They’ll match donations anywhere from $25 to $5,000 at a 1:1 ratio, allowing employees to double their contributions to eligible nonprofits.
The company provides clear guidelines for matching gifts from donor-advised funds. Here’s what the company has to say:
“We do not match charitable gifts to private foundations, family or donor-advised funds, or gifts to political or fraternal organizations.”
Learn more about Bank of America’s matching gift program.
Chevron provides matching gifts to multiple types of nonprofit organizations, up to $10,000 per employee each year.
Both full-time employees and retirees are eligible for matches, but while retirees can request up to $3,000 in matches annually, current employees can request up to $10,000 in matches annually.
Here’s what Chevron’s Humankind Matching Gift Program guidelines say about donor-advised funds:
“Donor-advised funds must be directly funded by the employee, retiree, or director only, and the fund must maintain a separate account segregating the contributions of the donor. Contributions made by a qualified family foundation or donor-advised fund must be directed by the donor and made on his or her behalf.”
Learn more about Chevron’s matching gift program.
3. How a Matching Gift Database Can Help
For the most part, companies’ matching gift programs tend to be well-thought-out, but you’ll likely run into many companies where this isn’t the case. A lot of businesses offer matching gifts but have a lot of restrictions regarding eligible organizations and contribution types.
It’s up to your organization to research all your donors’ employers’ guidelines. This can be a long, arduous process, but a matching gift database (like Double the Donation) can help!
Here’s how it works:
- Your nonprofit embeds the tool directly to your site or online donation page.
- To determine eligibility, corporate employees search their employers.
- The results (i.e. available forms, guidelines, restrictions, etc.) are shown instantly.
Double the Donation offers the world’s leading matching gift database and volunteer grant database. More than 8,500 organizations use it, because nonprofits can’t afford to miss out on these valuable revenue opportunities.
You can pinpoint donors who are eligible for matching gifts, and by searching their employers, you can determine if their contributions are eligible based on factors like donation size or type (e.g. donor-advised funds). A matching gift database like this ensures that you maximize your donors’ impact!
While not all companies offer matches for gifts from donor-advised funds, there are a considerable amount that do. It just takes a bit of research on your end!
Instead of assuming that these contributions can’t be matched, check into all eligibility requirements for your donors’ employers. Otherwise, your nonprofit will miss out on some major revenue opportunities!
Managing finances and donations can be a difficult step for nonprofits, and it comes along with a lot of questions. To make the process easier, check out our matching gift guide below.