Why donor‑advised funds are reshaping the UK giving landscape

Donor advised funds, or ‘DAFs’, are not a new phenomenon but they are becoming a key focus for philanthropy teams. UK-based philanthropists are increasingly turning to DAFs to manage their wealth more effectively and as they are the fastest growing UK philanthropic giving vehicle, if your philanthropy team hasn’t yet considered how to approach DAFs, now is certainly the time.

According to research carried out by Barclays Private Wealth on a sample of 500 high-net-worth individuals (HNWIs), 26% cited that establishing a DAF was their intended next step in their philanthropic journey.[1] The scale of wealth held in DAFs is significant for the UK charity market. The National Philanthropic Trust reports that in 2023 charitable grants made to charities from DAFs in the UK reached £645.4 million, which is a 16.4% increase from 2022. This is a significant jump and mirrors the steady growth in DAF-giving that has been seen in the USA. Overall, research from the National Philanthropic Trust calculates that there is currently £2.8 billion of charitable assets held in DAFs in the UK.[2]

What exactly is a DAF?

A DAF is a charitable giving account administered by a registered charity. They represent a tax effective alternative to establishing a charitable foundation or giving directly to charity, as they provide the same tax benefits to the philanthropist without much of the admin. As assets are held with a DAF provider, it is also both time and cost effective to the donor, as the provider will generally carry out due diligence for the donor as well as oversee all administration for the fund.

A variety of assets can be given to a DAF, from cash to cryptocurrency to shares and beyond. Donors to a DAF have complete control over where their funds are donated and can choose to be anonymous.

Why are they popular?

As well as the cost and time efficiencies represented by outsourcing the management of their fund, donors have no legal or regulatory responsibility. All due diligence is carried out by the DAF provider (and ultimately signed off the by DAF provider’s trustees), therefore donors can rest in the knowledge that checks and balances have been carried out on their behalf.

Another advantage to DAFs is there is no “one size fits all”. Individuals, families and corporate organisations can open a DAF (partners in legal firms, for example, are coming together to use this method of giving) and, as such, they give significant flexibility to different types of donors without the administrative burden. Depending on the DAF provider, donors are generally supplied with a dedicated relationship manager for their fund, and it is their role to interact with both the donor and chosen charity to ensure giving is smooth.

As DAFs offer a truly flexible way of giving, even legacies can be held in DAFs. This is a more private way of donating a legacy than a public will and will be administered – as with any legacy – with a letter of wishes. In the event of a donor’s death, nominated successors for the fund can also be named. There can also be advantages around inheritance tax and giving across borders, making DAFs an appealing giving vehicle for philanthropists and their families.

Who looks after DAFs?

There are a wide range of DAF providers across the UK. Some of the best known include:

• Prism the Gift Fund
• Charities Aid Foundation (CAF)
• Stewardship
• Chapel & York
• The Master Charitable Trust (run by C. Hoare and Co.)

All have slightly different offerings to their philanthropist clients based on their origin, ethos and approach, and Philanthropy Impact gives a helpful overview of some of the most prominent UK DAF providers in its report Donor Advised Funds in the UK 2024.

Community foundations are perhaps a more well-known type of DAF provider (even if they are not historically recognised as DAFs), enabling donors to give back to their chosen local community. According to Philanthropy Impact

Building a long term, permanent resource for the benefit of local communities is at the heart of what community foundations do.

And as such, donor advised funds are often pooled in long-term endowment funds to generate investment revenue for the local community.[3]

DAF providers are commonly viewed as wealth intermediaries (most often as philanthropy advisors), but in fact this is not their role – they administer and distribute funds and provide information but do not advise or recommend. That is an important difference.

Intermediaries such as philanthropy advisors, asset managers and charity lawyers are separate entities, and may provide philanthropic and financial advice to their (donor) clients; they work with both the DAF provider and the donor to ensure funds are given in line with a donor’s interests and wishes.

What do charities need to know?

Transparency and good governance

First and foremost, make yourself visible to DAF donors and providers. Some charities have created dedicated webpages making it clear that giving via a DAF is an option, and providing clear details on how to do so will eliminate any barriers for providers and donors. Making sure annual and impact reports, and other policies and governance information, are on your website will support DAF providers to carry out due diligence efficiently, and have the paperwork they need at their fingertips.

A common barrier for charities when accepting gifts from DAFs is the anonymity it brings for the donor. This makes it more challenging to follow ethical fundraising and due diligence policies. It is important to note that as the charity entity managing the DAF, all DAF providers will carry out a level of due diligence of their own, but reputational risk for individual causal areas may not be possible to determine. Make sure this issue is on the agenda for your board of trustees to discuss and agree, and that it is subsequently incorporated into your decision making framework for the charity’s due diligence – this will help to avoid any bumps in the road later down the line.

Understand the market and the mechanic

It is worth ensuring that philanthropy teams have a solid understanding of the different types of DAF provider, as they offer different types of services to donors. By understanding more about why donors have selected the provider they’re using, this might tell the charity something about their motivations and interests.

Timelines for giving from DAFs can be unpredictable – even more so than established charitable trusts and foundations. Be aware of this, as gifts may be anonymous and unexpected, making forward planning more challenging. If you receive a gift via a DAF, make sure you ask about reporting requirements and donor expectations – some providers may have a template for this, and by demonstrating reliability in timely and impact-led reporting you will put your best foot forward with the DAF provider.

DAF providers should not be confused with wealth advisers. There may be a host of different people advising donors, from family members through to asset managers, and they will be driving decision-making for donors. Try to find out as much as you can about who is involved in the gift you’ve received so you can tailor your approach accordingly and build relationships with the right stakeholders.

Channel your relationship management skills

DAF providers are often viewed as impenetrable gatekeepers between the charity and the donor, but as dedicated professionals whose role is to support the philanthropists they represent, DAF providers are valuable allies in supplying donors with relevant thanking, reporting and other general communications. If you receive a gift via a DAF, work with your DAF provider contact to understand:

• What are the donor’s motivations and longer-term interests – might future opportunities be possible?
• How would the donor like to be updated on the impact of their gift?
• What type, frequency and format of communications would they prefer?
• Might they be open to meeting with the charity directly?
• How does the DAF provider carry out donor due diligence?

Ultimately, while effective and quality communications with DAF providers will pay dividends, don’t forget they are not providing advice to the donor on who to donate to; the donor should be your priority audience.

Tailor your communications

Put yourself in the shoes of the DAF provider when you’re preparing donor communications for them to pass on. If you provide polished PDF documents, you will have more control and there will be less chance for any alteration in your messaging. It will also make it easier for providers to pass along the information. Thinking about how you will thank donors, especially if you receive an anonymous gift, is also important – make sure your teams are comfortable in doing this and have templates prepared should a DAF gift arrive.

Timely communications can make a significant difference to the donor’s (and the DAF provider’s!) experience, even if they are giving via a DAF. As with any major donor, focus on creating personalised communications that speak to the donor in their language. You can pass on event invitations, updates and other communications via the DAF provider too.

In conclusion

DAFs are an important part of the philanthropy landscape in the UK and are expected to increase in popularity. Philanthropy fundraisers already have the skills required to facilitate these modes of giving, but time and care is required to set your function up for success in this area, and to make the process as easy as possible for providers and donors alike.

Simon Dickson, Senior Consultant
February 2026

[1] Barclays Private Wealth, The Modern Philanthropist (2025)

[2] NPT UK, The 2024 Donor Advised Fund Report

[3] Philanthropy Impact, https://www.philanthropy-impact.org/sites/default/files/user-uploads/daf-research-2024-updated_version.pdf

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