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9 reasons why people put money in holding pens (such DAFs or foundations) instead of giving directly right away

Greg Warner is CEO and Founder of MarketSmart, a revolutionary marketing software and services firm that helps nonprofits raise more for less. In 2012 Greg coined the phrase “Engagement Fundraising” to encapsulate his breakthrough fundraising formula for achieving extraordinary results. Using their own innovative strategies and technologies, MarketSmart helps fundraisers around the world zero in on the donors most ready to support their organizations and institutions with major and legacy gifts.

1. Indecisive. They want and need to give and they might have organizations in mind, but they haven’t decided where to give yet.

2. Fearful. They are afraid to give impulsively. They’ve done that before and encountered donor remorse. So they put the money in the holding pen as a ‘circuit breaker’.

3. Unprepared. They have a good idea of which organization they want to give to but feel they still need to do their due diligence before they pull the trigger

4. Uncertain. They want to be sure they can make an impact and get the results they desire from their gift so they need more time to become convinced.

5. Distrustful. At this time, they feel that no organization is deserving of their money (possibly because the staff they’ve met with at various organizations has been off-putting, their missions seem unclear or they are not sure they can be trusted). Yet, they do believe they’ll find a deserving ‘partner’ they can trust some day. So they put the money aside in hopes that that will happen sooner or later.

6. Indignant. The fundraisers they have met have not shown sincere interest in them, their life story and how it entwines with the mission, their goals and desires, and how they are hoping to find meaning in their life. So, they put the money in the holding pen figuring that special someone or ‘some-cause’ will come along showing interest in them, not just their money.

7. Considerate. They want to involve their significant other or their spouse. Putting the money aside as they discuss their options ensures that everyone’s voice can be heard.

8. Joyful? Perhaps they believe (subconsciously) that, by using those instruments, they get to feel like they’re giving the money twice. First when they move it to the ‘holding pen’ and then again when they recommend the money goes to its final destination. Therefore, they get a double dose of dopamine (the feel-good-drug).

9. Greedy? The tax write-off is always a nice incentive. But make no mistake, these people are charitable. They DO want their money to be used to help others. They are not hoarding it. If they simply were hoarders, they’d never put it in a DAF or foundation in the first place. Giving is still giving. A tax write-off only reduces the ‘cost’ of giving. If you give them value (a good reason to ‘recommend’ the money go to your cause) they’ll make the recommendation in your favor.

 

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>>Ya Gotta Give ‘Em Value
>>Value
 

5 responses to “9 reasons why people put money in holding pens (such DAFs or foundations) instead of giving directly right away”

  1. Thank you Greg for illuminating us on the various reasons why donors/philanthropists establish DAF’s. They are all legitimate reasons from a donor’s perspective and calls on fundraisers to understand and respond appropriately.

    • Greg Warner says:

      You’re welcome Solomon. And thank YOU for not being like a lot of fundraisers… who whine to me saying the donors and DAFs stink and the donors should just give right away (those fundraisers are like petulant children). 🙂

  2. Thank you, Greg. I am really enjoying your content and insights. Duncan

  3. Greg,
    Enjoyed your post, it is right on target how donors want to park their “charitable dollars”in a DAF or Foundation..my quest is how to get them to put the focus on us in their giving plans as they evolve..When I was in HE it was much easier to do so but working in the Human Service area it is more challenging but we continue to make progress..www.sarahreed.org
    Gary Bukowski

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