Specific Steps Nonprofits Can Take to Unlock QCD and DAF Gifts 

Two tools in particular are reshaping modern philanthropy:

Qualified Charitable Distributions (QCDs) and Donor-Advised Funds (DAFs).

Both allow donors to support causes they love. Both offer tax advantages. And both represent billions of charitable dollars waiting to be activated. Yet many donors — and even nonprofits — still find them confusing. LifeLegacy, the leading planned giving platform for nonprofits, understands this challenge.

Here’s a simple breakdown of what these tools are, why they matter, and how nonprofits can help donors move from intention to action. Let’s start with the definitions.

What Is a Qualified Charitable Distribution (QCD)?

A QCD is a direct gift from an IRA to a qualified nonprofit.

In plain language:
If a donor is age 70½ or older, they can send money directly from their IRA to your nonprofit — and that gift is not counted as taxable income.

This matters because many retirees must take Required Minimum Distributions (RMDs) from their IRAs. A QCD allows them to satisfy that requirement while supporting a nonprofit — without increasing their taxable income.

Why donors like QCDs

• Reduces taxable income
• Helps meet RMD requirements
• Simple and direct
• No need to itemize deductions

Why nonprofits should care

• Gifts often arrive late in the calendar year
• Average QCD gift sizes are larger than typical annual gifts
• Donors who use QCDs tend to be loyal long-term supporters

What Is a Donor-Advised Fund (DAF)?

A DAF is a charitable investment account.

In plain language:
A donor contributes money to a DAF, receives an immediate tax deduction, and then recommends grants to nonprofits over time.

DAFs are now one of the fastest-growing charitable giving vehicles in the United States. Billions of dollars already sit in DAF accounts — ready to be granted — but nonprofits must proactively invite donors to use them.

Why donors like DAFs

• Immediate tax deduction
• Ability to give over time
• Simple recordkeeping
• Can involve family members in philanthropy

Why nonprofits should care

• DAF donors often give larger gifts
• Grants can be repeated annually
• Many donors already have DAFs — they just need prompting

The Opportunity for Nonprofits

Many donors already qualify for QCDs. Many others already have DAF accounts. But without clear guidance, they may never use these tools to support your organization.

The biggest barrier is not willingness — it’s awareness.

That’s why donor education is essential.

Simple Marketing Language Nonprofits Can Use

Here are examples of donor-friendly messaging your organization can use:

For QCDs:

“If you are 70.5 or older, you may be able to give directly from your IRA to support [Nonprofit Name]. This type of gift, called a Qualified Charitable Distribution, can help you meet required minimum distributions while reducing taxable income. It’s a simple way to make a meaningful impact today.”

For DAFs:

“Do you have a Donor-Advised Fund? You can recommend a grant to [Nonprofit Name] in just minutes. Your gift helps advance our mission. 

Don’t have a DAF but are interested in starting one? Your investment advisor can help you create a DAF, after which you receive an immediate tax deduction. Then you can recommend grants from the DAF to us over time.”

Short, simple, donor-friendly language is often all that’s needed to spark action.

How Donors Actually Make These Gifts

Clarity around next steps is critical. Here’s how nonprofits can guide donors:

Steps for Making a QCD

1. Confirm the donor is age 70.5 or older
2. Ask their IRA custodian to send a check directly to your nonprofit
3. Provide your organization’s legal name and mailing address
4. Ensure the check is payable directly to the nonprofit
5. Provide a gift acknowledgment receipt

You can also connect with the LifeLegacy team to learn more about our QCD Tool. LifeLegacy’s QCD tool screens donors for eligibility, guides them through the required paperwork with their financial institution, and gives your team early visibility into gifts, even before they’re completed. 

That’s it. No complex paperwork required.

Steps for Making a DAF Gift

1. Donors log in to their DAF provider (Fidelity, Schwab, Vanguard, etc.)
2. Search for your nonprofit by name or EIN
   
   
3. Enter the grant amount
4. Submit the recommendation

Most DAF grants are processed within days.

Where LifeLegacy Fits In

Helping donors understand these tools are only part of the equation. The real opportunity lies in offering donors a simple, guided way to take action, alongside broader legacy planning.

LifeLegacy’s Giving Suite allows nonprofits to offer:

• Digital estate planning tools
• QCD and DAF education resources
• Donor-friendly action pathways
• Marketing playbooks and outreach calendars

We help nonprofits not only provide giving tools, but also communicate them consistently and effectively, even with limited internal staff capacity.

A Final Thought

Your donors want to give. Often, they just need a little guidance on how to do it in the most meaningful and tax-smart way.

By educating supporters about QCDs and DAFs — and giving them clear next steps — nonprofits unlock generosity that might otherwise remain untapped.