In the world of charitable giving, Donor-Advised Funds (also known as DAFs) have become a popular tool for philanthropists, offering flexibility, tax advantages, and an easy way to manage donations. However, one question that often arises is whether donations made through DAFs are eligible for matching gift programs.

Matching gifts, a common practice among employers to amplify charitable contributions, are an effective way for donors to maximize their impact. But when it comes to DAFs, the rules and eligibility can be a bit murky. In this post, we’ll explore whether you can take advantage of matching gifts when receiving contributions through a Donor-Advised Fund and what your team should know to ensure your impact is maximized:

• What to Know About Donor-Advised Funds (DAFs)
• Typical DAF Matching Gift Eligibility Requirements
• 6 Companies that Match Employees’ Donor-Advised Funds
• How a Matching Gift Database Can Help
• Bonus: Donor-Advised Funds + Challenge Match Campaigns

Navigating matching gifts with Donor-Advised Funds can be tricky, but understanding their nuances is crucial in maximizing your charitable giving potential. In the following sections, we’ll take a closer look at the eligibility requirements for matching gifts, highlight companies that do support DAF donations, and provide tips on how you can easily track and take advantage of these opportunities. Let’s begin!

What to Know About Donor-Advised Funds (DAFs)

Donor-Advised Funds (DAFs) have gained significant popularity in recent years as an efficient and flexible way to manage charitable giving. Essentially, a DAF is a philanthropic vehicle that allows donors to make charitable contributions, receive an immediate tax deduction, and then recommend grants to qualified charitable organizations over time. Think of it as a charitable savings account where you can deposit money, invest it for growth, and choose where and when to distribute funds.

Let’s take a closer look at the key features of DAFs:

Tax Advantages

When you contribute to a DAF, you can claim an immediate tax deduction for the full amount, even if you choose to distribute the funds to a charity at a later date. This allows you to benefit from tax savings right away, while still having the flexibility to decide on your charitable donations over time.

Investment Growth

Contributions to a DAF can be invested in a variety of investment options, which may allow your charitable dollars to grow over time. The interest or investment returns generated within the fund are not subject to taxes, meaning you can potentially give more to the charity of your choice as the value of the fund increases.

Flexibility in Giving

One of the most appealing aspects of DAFs is the ability to recommend grants to multiple charitable organizations over time. You can spread your donations across a variety of causes, or give larger gifts to a single charity. Plus, you can make recommendations on when and how those grants should be distributed.

Eligibility and Control

While DAFs are managed by a sponsoring organization (such as a community foundation or financial institution), the donor retains advisory control over how the funds are distributed. However, it’s important to note that the sponsoring organization is legally responsible for ensuring grants comply with IRS rules and that funds are used appropriately.

Anonymity

If you prefer to make anonymous donations, DAFs can be a great tool. While you can recommend a grant to a charity, the sponsoring organization can release the donation without revealing your identity, offering a layer of privacy.

While DAFs provide incredible flexibility and benefits, it’s important to understand the rules surrounding them, especially when it comes to matching gifts, as these funds can sometimes complicate eligibility for matching contributions. Let’s dive deeper into whether you can utilize matching gift programs when donating via a DAF.

Typical DAF Matching Gift 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.

Let’s take a look at some major companies’ matching gift guidelines for charitable donations from donor-advised funds below.

6 Companies that Match Employees’ Donor-Advised Funds

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.

1) Edwards Lifesciences

Edwards Lifesciences matches donations up to $5,000 per full-time employee per year.

The company is also very clear regarding its 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.

2) American Express

American Express not only matches employee donations (sometimes at a 2:1 ratio), but it also has 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.

3) Dow Chemical

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.

4) CarMax

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.

5) 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.

6) Chevron

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.

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:

1. Your nonprofit embeds the tool directly to your site or online donation page.
2. To determine eligibility, corporate employees search their employers.
3. The results (i.e., available forms, guidelines, restrictions, etc.) are shown instantly.

Double the Donation offers the world’s leading corporate giving database, providing information on programs such as matching gifts, volunteer grants, payroll giving, sponsorships, and other giving opportunities. Today, over 8,500 organizations use it because nonprofits and schools 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!

Bonus: Donor-Advised Funds + Challenge Match Campaigns

In addition to corporate matching gifts, challenge match campaigns are a powerful way to boost donations, and when paired with Donor-Advised Funds (DAFs), they can significantly amplify your impact. Unlike employee matching gifts, challenge matches are typically initiated by individuals, organizations, or foundations to inspire others to donate by offering to match funds dollar-for-dollar, up to a specific limit.

Here’s how challenge match campaigns work with DAFs:

• Empower donors to lead: If a donor has a DAF, they can initiate a challenge match, where they pledge to match donations made by others to your organization, helping to drive additional contributions.
• Increase engagement: Challenge matches create excitement and urgency, motivating more people to participate in the campaign.
• Maximize giving: The matching component encourages more donations, allowing the initial donor to significantly increase the overall impact of their DAF contributions.

While challenge match campaigns are distinct from employee matching gifts, they provide an excellent opportunity to expand the reach of your charitable efforts and maximize the effectiveness of Donor-Advised Funds in nonprofit fundraising. By combining both strategies, you can greatly enhance the support you receive for your cause.

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Wrapping Up & Next Steps

For nonprofits, understanding the relationship between Donor-Advised Funds and matching gifts is essential in maximizing fundraising efforts and engaging donors effectively. While DAFs offer donors flexibility, tax benefits, and a streamlined way to manage their charitable contributions, they don’t always meet the criteria for matching gift programs offered by employers. This can create some challenges in fully leveraging corporate matching funds.

It’s important for nonprofits to be proactive in communicating with their donors about the potential limitations of DAFs when it comes to matching gifts, while also exploring alternative strategies, such as challenge match campaigns, to encourage more giving and amplify donor contributions. By clearly outlining DAF donation options and educating donors about how matching gifts work, nonprofits can create more opportunities for matching and maximize the impact of every donation.