Donor-Advised Funds for Charitable Giving with Adam Nash from Daffy
This is one of the last podcasts of the year and during the month of December, I’m always talking to clients about year-end planning, especially around taxes and charitable donations. We’ve talked about charitable giving specifically with donor-advised funds on this podcast as Mrs. Frugalwoods is a big proponent and shared how she utilizes them to not only help with their tax planning but also how her family is able to give more meaningfully because they have the funds. I have always loved the idea of donor-advised funds, but always hated how they seemed to only be a conversation topic for wealthy families. Well, finally there is a great option for people of all financial shapes and sizes to consider donor-advised funds and it’s called Daffy. Joining me today is Adam Nash, CEO and Co-Founder of Daffy to talk more about donor-advised funds, why December is the perfect time to start one, and how Daffy is making it easier for all of us to give back not only in December but year-round for many years to come.
What are we drinking?
Adam Nash - Quad venti almond sugar-free vanilla latte
Shannon - Black Cherry Schweppes
Podcast Notes
Adam started with degrees in computer science and later got his MBA. He has always been interested in the intersection of technology with humans. There's a massive opportunity for this in personal finance. People are emotional about money, even though, on the surface, it's just numbers.
Daffy is Adam's latest love. The idea came from a combination of a few things, but a huge part because of Adam's kids. At school every Friday, they bring spare change, put it in a shared piggy bank, and collectively decide where to donate the money as a class.
Donor-advised funds were the perfect candidate when he was thinking about product ideas for a new company. They're a fantastic resource, but generally, they're only marketed to the ultra-wealthy. Daffy stands for donor-advised funds For You. The goal is for everyone to have access to donor-advised funds. There are many benefits to donor-advised funds, and Daffy brings them to a broader audience.
Donor-advised funds have been around for a long time. They're a tax advantage investment account where you can put money, stocks, crypto, or ETFs and receive an immediate tax deduction. Once the money is in the fund, it compounds and grows tax-free. Once you're ready to donate, you can send it directly to a charity.
Traditionally, these funds are seen at Fidelity or Schwabb, but they have high minimums and fees. They're targeted at folks who donate hundreds of thousands of dollars.
Benefits of Donor-Advised Funds:
There are many ways to contribute to these funds.
If you purchased investments, stocks, or crypto assets, donor-advised funds are a way you can sit on them a bit longer.
You don’t have to know exactly where your donations will go to take advantage of the tax benefits that come with donating. You can also save throughout the year and donate one sum at once. If the funds go to a qualified non-profit, they won’t be taxed again.
While the end of the year is a great time to think about giving, there are huge benefits to consistently setting money aside. If you automate it, you ensure this goal is taken care of.
Charitable donations are one of the best tax deductions out there. The IRS has a strict December 31 deadline for tax benefits associated with donating. Contributing to these funds gives you all the tax benefits without the obligation of deciding exactly where that money should go.
Donor-advised funds are an amazing tool for folks who have variable incomes. In years you make more money, and you can contribute more to these funds. This way, in slower years, your yearly giving can remain consistent, since it comes from your fund.
About Daffy
Daffy is designed to be simple, so you can get started quickly. You can do it online or through the app. The goal is to make giving as easy as possible, and there are no minimums to start.
The subscription starts at $3 per month, with the highest tier costing $20.
A simple, flat, transparent pricing model is important to Adam. The industry tends to charge high fees on these types of accounts.
You can follow other people and see who they give to.
Daffy has a huge database of qualified organizations eligible for donations. If something is missing, members of the community can request they be added!
The investment process is straightforward. Depending on your goals and risk tolerance, there are portfolios you can pick from.
Family Plan
On Daffy’s first anniversary, they launched their family plans. In the tech industry, most services have a family plan: Apple, Amazon, and YouTube. You can have one or two organizers on the fund and add up to 24 people to your family. Those other folks can’t directly contribute, but they can request donations.
One day, Adam and his wife donated to an organization they’ve supported for years, and the kids got a notification on their phones. They asked about why they had chosen this organization, and it was a great conversation starter. People enjoy giving together.
We recommend bringing kids into the money conversations at an early age. It’s essential to help children understand your income, expenses, and giving.
Children learn by observing. Letting them be involved in the conversations and have a voice is a great way to lead by example.
Other Notable Daffy Features
They make it simple to invest in stocks and crypto.
They are the first donor-advised funds with an app in the Apple App store.
There are no minimums for people to get started, so it really is for everyone. People of all financial shapes and sizes can level up their giving process.
Not all donor-advised funds offer crypto options, which makes it a popular choice at Daffy.
If people want to start with Daffy, they can go to the website or download the App. Everything is built by top-notch engineers, and it only takes a few minutes to get started.
Takeaway: My biggest takeaway is that giving should be a part of all of our budgets and with a tool as easy to use as Daffy, there’s honestly no reason why you shouldn’t start now.
Random Three Questions
What is the next business you would like to be a part of?
What is something you like to binge?
If this was your last meal on earth, what would it be?
Connect with Daffy & Adam Nash
Website: daffy.org
Twitter: @daffygiving & @adamnash
LinkedIn: Daffy Giving & Adam Nash
YouTube: @DaffyGiving
For MYAM Listeners: Click here to get an extra $25 for charity when becoming a member of Daffy.
If you have any topics you would like me to cover on this podcast, or if you’d like to get in the financially naked hot seat, I encourage you to email me at Shannon@fingyms.com, or join the private Martinis and Your Money Facebook group, and let me know what you want to hear.
We are fast approaching the end of another year and we need to start preparing for a new year. If you or someone you know would like to have a supportive best financial friend along the ride with you for this journey, please check out financialgym.com. With memberships starting as low as $35 a month, we are the inflation-proof source for financial wellness for anyone. So head over or send friends to financialgym.com and schedule a warm up call today. As a reminder, our warm up call team is staffed with amazing and current Financial Gym clients that can answer any of your questions about our program.