While administrative fees assessed on donor funds will nearly always provide most of the revenue needed to support operations, direct fundraising from individual donors, internal distributions from the community foundation’s operating funds, and fee for service revenue provide additional support.

A community foundation’s operating model can vary in several ways based on the context in which it operates. Important factors include the needs and expectations of the community foundation’s donor base, which sectors drive the regional economy and how the community foundation is connected to them, and the community foundation’s own medium- and long-term strategy and the level of financial investment needed to drive that strategy forward.

Every community foundation that said they take action to activate dormant DAFs do so after no more than five years without fund activity, and 85% of respondents said they take action after three years. In cases where the time horizon may extend beyond five years, it will typically be a case of the donor intending to make more impactful grants after some period of growth for their fund. (n=141)

Nearly all survey respondents said they would, at minimum, attempt to contact the holder of a dormant DAF to encourage them to activate their fund. Follow-up steps are varied but commonly include distributing the fund in alignment with the donor’s original stated intent or transferring the fund to the community foundation’s own unrestricted fund. (n=163)

Nearly 70% of survey respondents said they have a written policy to activate dormant DAFs after the passage of a predefined, agreed upon period of time without the recommendation of a grant by a DAF holder. It’s expected that some portion of the 24% of survey respondents that didn’t respond to this question have such a policy in place as well. (n=183)

DAFs hosted by community foundation are shown to broadly and consistently maintain relatively high distribution rates as compared to other fund types. Close to half of all community foundations reported an aggregate DAF distribution rate of over 10 percent, while a little less than a quarter of the sample reported double-digit distribution rates across all fund types. Overall distribution rates tend to be higher at larger community foundations, which have a higher proportion of both DAFs and non-endowed funds than their smaller peers. (n=483)

DAF flow rates, calculated as grants divided by gifts, increased across the field for a second consecutive year. 49% of community foundations in the data sample reported a DAF flow rate that was higher than 100 percent, having granted more dollars from their DAFs in 2023 than they brought in as gifts. (n=480)

DAFs are a significant source of fund activity within the field and within this data sample. In 2023, they made up 30% of all reported assets, received 47% of all fundraising dollars, and gave 57% of all grant dollars (n=485). Grantmaking totals continued to climb with a median 5% year-over-year increase, despite broad declines in fundraising (with a median year-over-year decrease of 15%).

Large community foundations tend to house more DAFs, which can be high touch in nature and require additional staff to grow and manage, than their smaller peers.

Averages were used to total 100%. (n=185)

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