Donor-Advised Funds and Trusts: How One Nonprofit Increased Legacy Gifts by 300%
Executive Summary / Key Results
When the "Community Arts Collective," a mid-sized nonprofit, wanted to secure its financial future, they turned to integrating donor-advised funds (DAFs) and charitable trusts into their planned giving strategy. By leveraging our free online estate planning platform and educational resources, they empowered their donors to create lasting impact. Within 18 months, the organization saw a dramatic transformation:
| Metric | Before Implementation (Baseline) | After 18 Months | Change |
|---|---|---|---|
| Donors with documented estate gifts | 12 | 48 | +300% |
| Total projected legacy gift value | $850,000 | $3.2 million | +276% |
| New donors engaging in planned giving conversations | ~5 per year | ~30 per year | +500% |
| Average age of new legacy donor | 68 | 59 | 9 years younger |
This case study explores how simplifying the complex world of donor-advised funds and trusts led to measurable, mission-aligned growth.
Background / Challenge
The Community Arts Collective (CAC) had a passionate donor base but faced a common challenge: their planned giving program was stagnant. Most legacy gifts came from a small group of older, long-time supporters through simple wills. The board and development team knew that tools like donor-advised funds and charitable trusts could unlock significant giving from a broader audience—including younger, financially savvy donors and those with highly appreciated assets like stock or real estate.
However, they encountered significant barriers. Their donors found the concepts of charitable remainder trusts (CRTs), charitable lead trusts (CLTs), and DAFs intimidating and legally complex. The process of setting up these vehicles traditionally required expensive consultations with attorneys and financial advisors, which acted as a major deterrent. CAC's small staff didn't have the expertise to guide donors through these options confidently. They needed a way to demystify these powerful tools, make them accessible, and integrate them seamlessly into their donor outreach—all without adding prohibitive costs.
Solution / Approach
CAC partnered with our platform to create a comprehensive, donor-centric planned giving initiative focused on education and accessibility. The solution was multi-faceted:
1. Education First: We developed a dedicated resource hub on CAC's website, powered by our content, explaining donor-advised funds and trusts in friendly, jargon-free language. This included clear comparisons:
| Vehicle | Best For | Key Benefit | How Our Platform Helps |
|---|---|---|---|
| Donor-Advised Fund (DAF) | Donors who want to make a charitable contribution now, receive an immediate tax deduction, and recommend grants to nonprofits like CAC over time. | Simplicity, tax efficiency, and flexibility in grantmaking. | Guides donors on how to name CAC as a beneficiary of their DAF account for a legacy gift. |
| Charitable Remainder Trust (CRT) | Donors with highly appreciated assets (e.g., stock, real estate) who want to sell tax-free, receive lifetime income, and leave a major gift. | Avoids capital gains tax, provides income, creates a large future gift. | Provides accessible information and connects donors with tools to model CRT scenarios. |
| Charitable Lead Trust (CLT) | Donors who want to support CAC now for a set period, then pass assets to family with potential tax benefits. | Provides current funding to the nonprofit, can reduce transfer taxes for heirs. | Offers clear explanations of CLT structures and their benefits. |
2. Empowering Donors with Free Tools: We directed CAC's donors to our suite of free, online estate planning tools. Donors could use these in their own time to understand how a bequest, a beneficiary designation from a DAF, or a trust could fit into their overall plan. This empowered them to come to conversations with advisors or CAC staff more informed and prepared. For example, a donor considering a CRT could first use our resource on how to donate appreciated stock for maximum impact.
3. Staff and Board Training: We provided CAC's team with training materials and simple guides so they could confidently discuss these options without giving legal advice. They learned how to ask the right questions, such as, "Have you considered using your donor-advised fund to create a lasting legacy?"
Implementation
The rollout was phased over six months. First, we helped CAC audit their donor database to identify prospects most likely to be interested in DAFs and trusts—typically those with a history of giving securities, who were business owners, or who had inquired about planned giving in the past.
Next, CAC launched a "Legacy Innovators" campaign. Instead of a generic "leave us in your will" message, they shared stories. One powerful mini-case was featured in their newsletter:
Mini-Case: The Rodriguez Family Mark and Maria Rodriguez, both in their late 50s, were long-time CAC supporters but felt they couldn't make a major gift without impacting their retirement. Through CAC's new resources, they learned about a Charitable Remainder Unitrust. They funded it with $500,000 of highly appreciated tech stock. They avoided substantial capital gains tax, secured a 5% annual income stream for life, and CAC is slated to receive an estimated $750,000 remainder gift. Mark said, "The platform's guide made a complex tool understandable. It gave us the confidence to talk to our advisor and make it happen."
CAC then hosted a series of virtual webinars co-hosted by a neutral financial planner (not selling services) who used our educational content to explain the mechanics and benefits of DAFs and trusts. All attendees received a follow-up packet with links to our free tools, including our complete guide to charitable trusts.
Finally, they made it a standard part of major donor conversations. Development officers would ask, "Is charitable giving part of your overall estate plan? We have some great, free resources that explain options like using a donor-advised fund or a trust that might align with your goals."
Results with Specific Metrics
The data tells the story of remarkable success. The 300% increase in donors with documented commitments was just the beginning. The quality and strategic nature of the gifts improved dramatically.
- Diversification of Gift Types: Previously, 100% of legacy gifts were simple bequests via will. After the initiative, the gift mix transformed:
- 45% Bequests via Will
- 30% Donor-Advised Fund Beneficiary Designations
- 20% Charitable Remainder Trusts
- 5% Charitable Lead Trusts
- Increased Engagement: The website's DAF and trust resource pages became the second-most visited section of CAC's site, with an average session duration of over 4 minutes, indicating deep engagement.
- Earlier Commitments: Engaging donors in their 50s and early 60s, rather than their 70s, created longer donor relationships and more opportunities for stewardship.
- Major Gift Catalyst: Five of the new documented commitments were for gifts over $250,000, all involving trusts or DAFs—a tier of giving their old program rarely touched.
CAC's Development Director summarized: "We didn't just get more gifts; we got smarter gifts. We're now having strategic conversations about asset transformation and legacy that position us as a partner in our donors' philanthropic goals, not just a solicitor."
Key Takeaways
This case study demonstrates that donor-advised funds and trusts are not just for the ultra-wealthy. When demystified and made accessible, they can revolutionize a nonprofit's planned giving program.
- Demystification Drives Action: Complexity is the enemy of adoption. Breaking down DAFs and trusts into clear, relatable concepts empowers donors to act.
- Free Tools Lower Barriers: By providing donors with reputable, free resources to start their planning journey, you remove the initial cost barrier and fear of a complex legal process. Explore our free will builder as a first step.
- Integration is Key: Success came from weaving these options into every layer of CAC's outreach—website content, donor communications, and one-on-one conversations.
- It's a Donor-Centric Approach: This strategy succeeded because it focused on solving donor problems (tax efficiency, income needs, family inheritance) while advancing the mission. It was about enabling their generosity in the most effective way possible.
For any nonprofit or advisor looking to harness the power of these vehicles, the lesson is clear: start with education, empower with accessible tools, and make it easy for donors to see themselves creating a legacy.
About Our Platform
We are a free online estate planning platform dedicated to making vital planning tools accessible to everyone. We partner with nonprofits, advisors, and individuals to provide easy-to-use guides, documents, and resources for creating wills, trusts, and charitable giving plans—all with no fees and a firm commitment to data privacy. Our mission is to help people plan wisely and give generously, supporting the impactful work of organizations like the Community Arts Collective. Learn more about how we can support your organization or your personal planning journey.
