As charitable giving continues to evolve, two channels are becoming increasingly central to donor strategy in 2026: Donor-Advised Funds (DAFs) and Qualified Charitable Distributions (QCDs).
Both introduce complexity into the donor journey. DAFs add an intermediary (the sponsor), while QCDs rely on a specific tax-advantaged mechanism (direct IRA-to-charity transfers). Nonprofits that treat these merely as alternative “ways to give” risk missed revenue and weakened donor relationships. Organizations that design intentional systems around them, however, can unlock larger gifts, improve retention, and deepen long-term engagement.
Why DAFs and ǪCDs matter more in 2026
DAFs have continued to scale. The Donor Advised Fund Research Collaborative (DAFRC) reported that in 2024 DAF accounts reached 3.56 million, assets grew to $326.45B, grants totaled $64.89B, and the overall payout rate was 25.3%.
ǪCDs are surging as well, driven by aging demographics and the simplicity of “give from IRA, exclude from income.” The IRS describes a ǪCD as a nontaxable distribution made directly by an IRA trustee to eligible charities, which can reduce taxable income regardless of whether the donor itemizes deductions. For 2026 specifically, the IRS inflation adjustment increases the annual ǪCD amount from $108,000 to $111,000 per person.
Finally, the broader 2026 tax environment increases the strategic value of “above-the-line” or deduction-independent giving tactics for some households. Recent reporting highlights notable changes to charitable deduction dynamics beginning in 2026, which can alter how donors perceive the after-tax cost of giving – and make mechanisms like ǪCDs comparatively more attractive for eligible donors.
The core strategy shift: stop treating DAFs and ǪCDs as “ways to give” footnotes
A common failure mode is relegating DAF and ǪCD messaging to a static web page. In 2026, high-performing organizations treat them as integrated donor pathways spanning acquisition, stewardship, and major/planned giving.
The NonProfit Times, summarizing guidance from fundraising leader Tim Logan, emphasizes a practical reality: when a check comes from a sponsor, you should assume it’s a DAF grant (or multiple grants) and work your internal processes to identify and attribute it correctly. Just as importantly, that same piece notes that donor anonymity is often overestimated; citing DAFRC survey findings, it reports only 3% of DAF donors remain anonymous when making grants. In other words, most of the time, you will know – and cultivate – the person behind the sponsor.
Build the infrastructure: attribution, tools, and staff fluency
1) Fix gift attribution in your CRM.
DAF gifts must be credited to the donor relationship even if the “legal donor” is the sponsor. The NonProfit Times recommends “soft credit” to the individual donor while still recording the sponsor as the source. This is not just data hygiene – it’s how you prevent stewardship gaps, ensure accurate donor lifetime value, and avoid misclassifying a loyal donor as “lapsed” because their giving shifted into a DAF.
2) Make DAF giving frictionless.
DAF grants are frequently initiated online which means that nonprofits that add DAF widgets and clear DAF instructions reduce drop-off. Sector benchmarks back this up: the 2025 DAF Fundraising Report highlights “digital-first” placement of DAF options across forms and appeals as a driver of growth, and notes that many organizations see meaningful increases when existing donors switch into DAF giving.
3) Train the full team, not just planned giving.
DAFs and ǪCDs show up across donor levels. The same 2025 fundraising benchmarking reports that 69% of DAF gifts are under $1,000, underscoring that DAFs aren’t only a major- gift vehicle. Train frontline fundraisers, gift processing, and donor care to recognize sponsor names, ask the right questions, and route opportunities.
Activate ǪCDs with targeted, compliant messaging
ǪCDs are a marketing game as much as a technical one. The NonProfit Times notes that even mentioning IRA/ǪCD giving to donors over 70 can lift response, including through simple outreach like postcards and email.
ǪCDs must go directly from the IRA trustee to the charity and must be made to eligible charities.
DAFs and ǪCDs are not merely alternative payment methods – they are donor behaviors based on wealth structure, tax incentives, and convenience. In 2026, the nonprofits that win will be the ones that capture identity and intent behind sponsor checks, make digital DAF giving effortless, market ǪCDs simply and consistently to eligible donors, and convert both channels into deeper, long-term commitments.
