I have raised major gifts and built planned giving programs at the University of Illinois Foundation and Rush University Medical Center, and I spent 15 years as a bank trust officer serving more than 125 charities. Sitting in both chairs taught me something that still catches mission-driven leaders off guard. The donor across the table from you has often already given the money away. It is sitting in a donor advised fund, waiting for a recommendation.

That is not a small pool. The DAF Research Collaborative’s spring 2026 revised analysis, which supersedes the figures it published in December, counts 1,512 sponsoring organizations holding $327.87 billion across 3.59 million accounts in fiscal year 2024. Grants out of those accounts reached $64.60 billion, up 17.9%, and the average account holds $91,300. Your donors are already using these accounts. The only question is whether you are prepared to receive, record and steward what comes out of them.

How the accounts actually work

A donor makes an irrevocable gift to a sponsoring public charity and takes the charitable deduction that year. The sponsor becomes the legal owner and the legal donor. The individual becomes the advisor, recommending grants over time. Sponsors nearly always follow the recommendation, but the legal authority is theirs, and that single distinction drives almost everything else.

Two consequences follow. Your gift receipt goes to the sponsor, and the advisor receives no second deduction, because the deduction was taken when the account was funded. And because it was already taken, the advisor cannot receive anything of value in return for a grant.

Unlike private foundations, these accounts carry no required annual payout, and critics make much of that. In the aggregate the payout rate was 25.2% in fiscal year 2024, roughly five times the private foundation minimum. Individual accounts vary widely, so your task is not to settle the policy debate. It is to be the organization the advisor thinks of first.

Why 2026 changed the calculation

Two provisions of the One Big Beautiful Bill Act took effect with the 2026 tax year.

Itemizers now face a floor. Contributions are deductible only above 0.5% of adjusted gross income, so a household earning $400,000 gets no deduction on its first $2,000 of giving. Floors reward concentration, and the standard response is to bunch several years of giving into one, often through a donor advised fund. Expect larger contributions in and steadier grants out.

Non-itemizers gained a deduction they did not have before: up to $1,000 of cash gifts, or $2,000 on a joint return. Gifts to donor advised funds, private non-operating foundations and supporting organizations do not qualify. Only outright cash gifts to public charities count, which is worth saying plainly in your annual fund appeals.

None of this is tax advice, and your gift officers should not be offering any. They should describe the landscape accurately, then refer the donor to a professional advisor.

The part that derails campaigns

A grant cannot pay for anything that carries a benefit to the advisor: gala tickets, table sponsorships with seats, auction purchases, athletic seating rights, tuition. Covering the benefit portion personally does not fix it, and sponsors screen for this rigorously.

Pledges are more nuanced than most gift officers believe. Under IRS Notice 2017-73, a grant may be applied to a pledge, enforceable or not, provided the sponsor makes no reference to the pledge, the advisor receives no other benefit and no deduction is claimed for the grant itself. Plenty of sponsors still decline. The practical answer is a non-binding statement of intent rather than a pledge agreement, and counsel should review that language before your next campaign, not during it.

Seven steps to take this quarter

• Count and code. Query sponsor names in your database, then hard credit the sponsor and soft credit the advisor. If your system cannot do both cleanly, fix that now rather than mid-campaign.
• Publish your legal name, employer identification number and mailing address on your giving page, with a line inviting donor advised fund grants.
• Replace the pledge agreement with a non-binding statement of intent for commitments funded this way.
• Train everyone who sells a ticket, including event volunteers and the business office, on the benefit rule.
• Acknowledge twice. The legal receipt goes to the sponsor, and a warm, personal, non-receipt letter goes to the advisor. The second letter is where the relationship lives.
• Ask how people give and who comes next. Most accounts allow an advisor to name children as successors or your organization as a remainder beneficiary, and donors often find that easier than a conversation about a will.
• Report like an investor relations department. Someone placed assets with a sponsor and then chose you. Show that person the result, in specific terms, without being asked.

Every technical structure in philanthropy exists because someone wanted to give and needed a way to do it well. The mechanics deserve your attention precisely because the relationships deserve it. If your organization is treating the sponsor as the donor, you are thanking a bank.

Lighthouse Counsel helps mission-driven organizations build the gift acceptance policies, database practices and donor conversations that turn complex giving vehicles into lasting relationships. To talk through what donor advised funds mean for your campaign or your annual fund, start a conversation with us at lighthousecounsel.com/contact.