Donor-Advised Funds vs. Volunteering: Which Actually Grows Giving?

You're a development director or a nonprofit founder. Headlines scream: donor-advised funds (DAFs) hit a record $327.87 billion in assets. Volunteer hours are worth $167.2 billion. Think pieces pile up. Debates rage. But you've got limited time and resources—so which should you invest in: a DAF program or volunteer engagement? Let's cut through the noise.

Why This Question Matters Now

In 2024, Americans gave $592.50 billion to charity (Giving USA 2025). Sounds great. But dig deeper: the share of households that donate has dropped from 65% in 2008 to about 49.6% by 2018 (NPTrust). Giving is concentrating among the wealthy—the top 50 donors alone gave $16.2 billion in 2024, up 32% (Giving USA 2025). So a few big players can move the needle. But if we care about growing the whole pie—not just shuffling dollars—we need to know what actually boosts generosity. And the research is telling.

The Case for DAFs: Efficiency and Scale

DAFs are booming. Assets hit $327.87 billion in FY2024, up 27.9%, with contributions of $90.57 billion (DAF Research Collaborative). Payout rate rose to 25.2%, and grants reached $64.60 billion, up 17.9%. But here's the catch: DAFs are for people who already have money. They're not creating new donors. A Financial Planning survey found 42% of Millennials who give use DAFs, versus just 10% of Baby Boomers. That's a generational shift, but it's still within the giving population. DAFs are efficient for the donor—immediate tax deduction, distribute later—but they don't necessarily expand the donor base.

The Case for Volunteering: Building Habit and Empathy

Now, volunteering. The U.S. formal volunteering rate rebounded to 28.3% in 2023, with 75.7 million people volunteering (AmeriCorps & U.S. Census Bureau). That's a massive pool of engaged citizens. And here's the kicker: a meta-analysis in Nature Communications found that empathy—naturally evoked through hands-on volunteering—is a robust correlate of charitable giving (Nature Communications, 2026). The same research showed that showing donors the consequences of their previous donations increased subsequent giving by 14%. That's the kind of direct feedback you get when you volunteer and see the impact. In other words, volunteering isn't just about the hours; it's about building a deeper connection that translates into more giving over time.

The Numbers That Matter: Comparing Impact

Let's put this in perspective. In 2023, volunteers gave 4.99 billion hours, valued at $167.2 billion (AmeriCorps & U.S. Census Bureau). That's more than half of DAF assets, and it's a direct injection of value into communities. Meanwhile, DAF grants were $64.60 billion in FY2024—impressive, but still less than half the value of volunteer time. But the real question is: which one grows the giving pie? The Nature Communications meta-analysis found that perceived effectiveness predicts giving in surveys, but only weakly in experiments. Telling donors their money will be used well isn't enough. What actually works is evoking empathy—and volunteering does that better than any DAF statement.

Why We Need Both—But Prioritize Volunteering

I'm not saying ignore DAFs. They're a reality of modern fundraising, especially for large gifts and planned giving. But if you're a small or mid-size nonprofit, your limited resources are better spent on volunteer engagement than on building a DAF program. Here's why:

• Volunteering attracts a broader demographic. The CAF World Giving Report found that globally, 25- to 44-year-olds give twice as much of their income as those over 55. These are the people most likely to volunteer, not to open a DAF.
• Volunteering creates a pipeline. A volunteer who sees your impact is more likely to become a donor. The empathy research backs this up: when people feel connected to a cause, they give more.
• Volunteering is more resilient. In GivingTuesday 2024, 9.2 million people volunteered, and 18.5 million gave money. There's huge overlap, but volunteering often leads to giving, not the other way around.

Bottom Line

Invest in volunteer engagement—not DAF solicitation. Build a volunteer program that offers meaningful, empathy-evoking experiences. You'll get immediate value from their time, and you'll cultivate a new generation of donors who give because they care, not because they're looking for a tax break. DAFs can wait; volunteers can't.

Sources

• Giving USA 2025 - https://givingusa.org/giving-usa-2025-u-s-charitable-giving-grew-to-592-50-billion-in-2024-lifted-by-stock-market-gains/
• Nature Communications (2026) - https://link.springer.com/article/10.1038/s41467-026-70230-8
• NPTrust - https://www.nptrust.org/philanthropic-resources/charitable-giving-statistics/
• DAF Research Collaborative - https://www.dafresearchcollaborative.org/research/annual-daf-report
• AmeriCorps & U.S. Census Bureau - https://www.census.gov/library/stories/2024/11/civic-engagement-and-volunteerism.html
• CAF World Giving Report - https://www.cafonline.org/home/about-us/press-office/world-giving-report-reveals-factors-that-increase-generosity-to-good-causes