How can a nonprofit ensure credit is given to a Donor Advised Fund for their donations?

Utilizing Account Soft Credits for the Donor Advised Fund is the most effective way for a nonprofit to ensure that credit is given for donations made through such funds. In the context of donor advised funds, it is essential to recognize that the primary entity making the donation is the donor advised fund itself. However, organizations also want to acknowledge the individuals who are behind those funds—in this case, the donors.

Soft credits allow the nonprofit to attribute credit to the individual donor without changing the donation's official record, which lists the donor advised fund as the entity making the contribution. By using soft credits, the nonprofit can maintain accurate records while still recognizing the contributions of individual donors for gratitude, engagement, or reporting purposes.

This approach enhances donor relationships and encourages further giving, as individual donors see their contributions acknowledged by the organization. It keeps the records precise and maintains the integrity of the funding source while promoting transparency and donor recognition—essential elements for building a strong donor base in the nonprofit community.