Why 2025 Will Set a Record for DAF Asset Growth, and What It Means for Your Nonprofit (news)

This week on the Nonprofit News Feed brought to you by Whole Whale, a B Corp. digital agency focused on analytics, advertising, and AI capacity. My name is George Weiner. I’m the Chief Whaler of Whole Whale. And I have Nick Azulay, Digital Strategist at Whole Whale. How’s it going, Nick? How are you enjoying the new facelift I gave the Nonprofit News Feed website? Hey, George, it’s going great. Yes, NonprofitNewsFeed.com got a glow up, if you will, new brand identity, totally new UX. So for dedicated listeners to this podcast, go check it out. It’s just fun. And we need a little fun, brevity, and uplifting branding in times like these. And I’m very excited for the new site, George. You did an awesome job. Yeah, serious topics covered in an unserious way. I think we’re trying to bring entertainment at least a little bit to some of this. And as we focus the brand, it is a complete detour from the much more, well, it was ugly as all get out before, but it has, I think, a bit more color and flair. So also thanks to our designer at Whole Whale, Carrie, who gave us that direction. And it’s like one of those things, like I didn’t like it and I didn’t get it at first. And then when I looked at it again, I was like, oh, I get it now. Yeah, sometimes it takes a year or two or six to really see what needs updating. Is it our sixth year, George? I think it is. Oh my gosh, yeah, I think we started in 2020. Yep, yep. New dawn, new year. And George, that takes us to our first story because not only is it a great year for the nonprofit newsfeed, but it’s also been a great year for DAFs, Donor Advised Funds. So George, I want to lead us off with an interesting stat. $450 billion. That’s the number. I remember that. George, we recently, or you on a podcast, recently talked about DAFs where we learned or predicted that 2025 saw a 40% increase in total donor advised fund assets within the year, pushing past the $450 billion mark. Now, George, the reason why we have to predict this number is because the official number won’t actually get to us until the end of this year for the DAF asset value number of last year. So we’re at about a 12-month delay. But we do think it was a record-breaking year for several reasons. We had a stock market that kept going up. Late 2025 tax changes pushed funds now decide later behavior. So some of that big, beautiful bill had various tax implications that might have increased contributions to these funds. And George, we also surpassed, we believe, the 3.5 million household holding DAF account number. That means that DAFs have gone from a niche kind of ultra-uber-wealthy donor vehicle to something a bit more mainstream. And that is why we wanted to talk about it today, George, because not only are we seeing the massive value of these DAFs increase, but we’re also seeing their overall mainstream adoption increase. And we wanted to talk about what nonprofits need to know. But George, at the top, what should listeners be thinking about? Yeah, just to rehash these numbers coming from the DAF Research Collective. They released these numbers. They pulled them from a number of aggregated sources, which is tough because after our conversation and you listened to this podcast and this podcast feed where we talked with Mitch from Chariot, givechariot.com, where they were also helping us realize what these numbers meant. And albeit they are a year old, in 2024, $326 billion was sort of reported with the total assets under management of these donor advised funds, which range across like 1,400 different institutions. The piece that I think you pointed to that is curious to me is the number of people holding DAFs in and reported for 2024 that we only just found out in the following year, December of 2025, was about 3.5 million, 3.5 million accounts. Now, an account can remember be owned by multiple people. Usually there’s a partner like two people or a family potentially that guides. So when you just think about your total addressable market, it is bigger than I previously thought and growing. I thought in the past when we talked about DAFs, donor advised funds, that we’re talking about high net worth individuals, folks with considerable means such that they would have a whole account and a whole tax structure, right? It’s a give now, realize that benefit now, and then distribute over time. And that distribution rate hovers around about 20 to 25%. But the mandated amount that they have to give out is technically zero. So it is nice that that distribution rate exceeds what the mandate is, but the market and the overall assets are growing even still far faster than that. So the friction for creating accounts is dropping. Groups like daffy.org and GoFundMes, they have these giving accounts. It’s becoming easier, reduced friction for the middle of the charitable market to create these accounts and then participate in this way as a giving mechanism. And I just think that has implications for how you communicate, how you build donation pages actually on your site, whether or not you have that as an avenue. Like one of the folks we work with is the giving block for donating crypto. And we trust them, have worked with them for a long time, but make no mistake, we think it’s a very good idea to have a separate crypto donation page. What about daff giving page? And this goes far beyond like one line of text at the bottom of your page. So right now, as far as I can see, you know, that is an opportunity for how you communicate and set up potentially your next round of giving and the fact that this is explosive growth. And I think within probably a decade, and I’m still sort of mapping out the numbers. But if we just look at charitable vehicles in the United States, if you look at foundations, we’re talking about roughly 1.5 trillion of funds. And this will be closing in on half a trillion, if our prediction is close. And at that growth rate, if we still see these types of things, it’s not long until that becomes comparable, and potentially eclipses. Yeah, George. So I think what’s so interesting about it is it’s so new. And so many organizations maybe are not necessarily thinking about how to engage with these vehicles of giving. So I think that is the impetus for why we wanted to highlight this story. Yeah, I mean, 2020, like we talked about, we started this podcast in 2020. That is with the daff research collaborative, they have data going back to 2020. In 2020, they estimated that and measured 165 billion in total assets. And now we’re talking in 2024 326 billion, and we’re estimating 450 for the previous year. And I don’t see anything that would slow that. Yeah, yeah. And that’s all I have to say about that. Great, George. Yeah, I think really important. And speaking of long term trends, and things nonprofits should be thinking about our next story comes as an opinion piece from the Stanford Social Innovation Review. Great outlet, if you’re interested in all things philanthropy and nonprofit trends. But there’s an article that they just published about how the free AI era is ending and nonprofits aren’t ready. And George, the TLDR of this article, basically, is that these AI companies have been subsidizing AI, to an extent, for the general public. Prices have been lower, there have been free tier access, they have been ad free. All of that is going to slowly change because the reality is, George, these mega companies worth billions of dollars, despite their value are still losing money because AI is expensive to operate and run. And they’re going to start recouping that money at some point. So I think, George, this is a little bit of the, you know, the Uber model of get everyone hooked, and then and then start kind of increasing the price situation. And the article makes the argument that nonprofits should prepare for this by pooling resources, potentially engaging with local or community nonprofit networks to start figuring out ways to build resilience as AI both becomes more expensive, but also increasingly integral into our processes, our operations, and so forth. So kind of a cautionary tale. And I think, George, this is going to be a big year for AI changes, we’re going to start getting AI ads, potentially other kind of user experience changes within AI platforms themselves. This will be a big year. And this is important for nonprofits to pay attention to. I think this story by Philip Allah, and Philip is the executive director of the Center for Augmenting Intelligence at the University of Detroit. Mercy is so prescient, because this is exactly what we are seeing. And he just puts it into words at like this critical moment where yes, the free lunch cannot last forever. What’s more, he points toward he points toward this new kind of digital of digital inequity. And he’s immediately pinpointing the fact that access to top tier token intelligence is actually something that is going to be tantamount to inequality, and going to have to be something that you pay for plan for. And he’s calling on the sector for plans. He’s calling on, you know, foundations and funders to think about this. You know, at cause writer, this is something I think about a lot, because we’re generating 2.5 million words, per day, for good for nonprofits. And we have a number of free tools that we put out there. But I’ll be honest, I with those free tools, I use tier two, less expensive models, because it’s bleeding money into these API’s. And what’s also interesting is, if you look at the sort of nonprofit free accounts that you can get, they’re not free, they’re still like pay per user per month. Anthropic Microsoft, Google for nonprofits has one, but it’s very, very, very, very throttled. In terms of the free thing that you get with Google for nonprofits AI, there is 350 per user per month, but they all have a price. And I cannot as of like this moment in time find a single place that offers a nonprofit, nonprofit API access to any one of these models. And when you get the API access, that’s kind of like the side door where you just get raw tokens. And you can request as many and put them into something that does not exist. And there’s a reason it doesn’t exist. Because the truth is, if someone gave me that firehose, I could create a platform for nonprofits that would let them create content for free at scale in like an unmetered way. But, you know, we don’t have that every single token is pay to play when we’re in the API landscape. Yes, we’re buying it sort of like Costco wholesale. But this article really points to this as the rising tension that will come. And I think it’s very well done. Yeah, George, I’d like to also add that not only is that access equity argument salient for nonprofits themselves, it’s also salient for the constituents and communities they serve, right? I have had teachers come to me, local community organizers saying, Hey, we are worried about tech access issues in places like, let’s say, underprivileged school districts, where, you know, the very well endowed school districts get access to all this cool new tech, they get the practical education on how to use frontier AI models, and the poorer districts get left behind. And not only do you have that at the local scale, but you also have that at the global scale. And George, it’s almost like a net neutrality kind of a debate, right? And unfortunately, the people that are going to lose out on this are the people who can’t afford these relatively high prices for AI usage, at which point, they use free models, at which point, George, if you’re not buying for the product, you are the product. And what will the ramifications of that be for people who are underserved communities predominantly that are going to be forced, they want to use this technology to interact with models that will train on them and turn them into the product. When you start, you start trending it out, right? This happens at macro, what are those second order ramifications? I don’t think we know something to think about. that read a one pager, and is more than happy to like, guess their way to success is huge, you can drive a bus through that. And I think that is that inequality that we’re talking about. Yeah, I will say, George, the tech sector has a very long and storied history of giving low end tech versions of frontier technology platforms to underdeveloped communities in countries. See also the Facebook free basics program, which gave like a lo-fi version of the Facebook platform to these countries that had very low digital literacy, very few internet governance safeguards, and it had a whole host of bad ramifications. I’m not saying this is that, right? But it’s a similar conversation that we’re going to start entering into. So important to think about. All right, George, our next story we won’t spend too long on. But this also comes from the Chronicle of Philanthropy. And it’s a quick story that Candid, the nonprofit data organization, is betting its future on becoming AI’s data source. They want to be that firehose for the AI models. And the foundation, Candid, by the way, was the merger of the Foundation Center and GuideStar. But they have laid off 42 people, one fifth of its workforce. And this article kind of goes through the future of Candid, emphasizing the value of their organization within AI platforms. Seems like maybe they’ll try to broker some kind of an agreement with these platforms, a la a major news publication outlet type situation. But kind of an interesting trend here, George. What’s going on? I think this is, and I have no insider information whatsoever here. This is all like looking from the outside in on what I have seen in our AI study. Our AI brand footprint study looked at how AIs across the six major players are recommending and referencing charities. And as a charitable data source, yes, those Candid outlets, the GuideStars, they showed up. Charity Navigator showed up. GiveWell showed up. These ranking groups that surface information of the top X number of things based on Y criteria, nonprofits, as third party sources that are referenced by these AI tools that then talk to the humans. The problem that I think these traditional organizations are having is they used to monetize that traffic. People used to come there, they used to donate, they used to subscribe, they used to engage in whatever revenue generating opportunities that were the result of creating and aggregating this kind of content. When you have that type of AI summarization and regurgitation, you don’t get the traffic. You get a fraction of that traffic. We have talked about that quite a bit. That’s when we get into AEO, answer engine optimization, but their organic traffic in all likelihood has done what Whole Whales, what the sectors, what many peoples have done, which is decreased. So too with it potentially your revenue generating opportunities. And so I think this is probably a very smart play. I think their plan to collect real time data directly from foundations rather than waiting for these two year late IRS filings is the right direction and being that source of truth. I don’t think this is about necessarily just making AI, firing people because of AI. This is second order effect of an overall marketplace shift. And we’ll probably cover the newspapers that are struggling across the board with this. So this was not meant to be calling out, candid for like, oh, look at them replacing humans with AI. This is a larger game, I think. Yeah, George, no. And it is for any content publisher, for any content publisher, this is an existential crisis because website traffic has decreased exponentially. It did with social media and now whatever kind of value. Don’t misuse exponential. It’s not exponential, it’s incrementally. It is over under 20%. For groups like HubSpot, it’s closer to 60%. So it depends on the type of content and the type of hit you’re taking. Yeah, for sure. All right, George, we have a feel good story. This is about an organization in Utah called the Nomad Alliance. They operate a converted bus that serves as a mobile shelter for people experiencing homelessness. It’s run by people who previously experienced homelessness. And the best part is the bus features bathroom showers, heating a food pantry and solar panels. And just wanted to highlight this awesome work out in Utah by the group Nomad Alliance, which is given help to people, particularly people who don’t have housing on the street during this very, very cold time of year. So shout out to their great work. Great. Empathy first innovation. Love it. Well, it’s time to suffer through another dad joke for nonprofits. Are you prepared, Nick? I’m ready. Why are DAFs so tough to make dad jokes around? I don’t know, George, why? The punchlines are always pending distribution. It’s more of a dig on slow distribution of funds from DAFs. It’s a real. Oh, oh, oh, I see. Maybe this punchline. Yeah, I that’s I. Yeah. Thanks, George.