Donor advised funds - what are they? How are they being used? And what innovations are these peculiar giving vehicles introducing to the field of philanthropy? In this episode of Tech in the Arts, Lead Research Ian Hawthorne sits down with Rebecca Jacobs, head of community funds at Charityvest, a young, digitally native DAF sponsor.
Transcript
Ian Hawthorne
Donor advised funds. What are they? How are they being used? And what innovations are these peculiar giving vehicles introducing to the field of philanthropy? I'm Ian Hawthorne, lead researcher at the Arts Management and Technology Lab here at Carnegie Mellon University, and today I'm sitting down with Rebecca Jacobs, head of community funds at Charityvest, a young, digitally native DAF sponsor, to talk about all that and more on this episode of Tech in the Arts.
I was wondering if you could just dive a little bit into what a DAF is. I'm going to be using, the term “DAF.” I don't know if that's industry standard, I've only ever written the words, so if people are out there saying D-A-F all the time, I could have that guy on my face right now. But if you want to just talk about what a donor advised fund is, because not everybody might know about this, it's kind of a niche area.
Rebecca Jacobs
Absolutely. It's funny you say that it's like the big, GIF versus GIF debate.
Ian Hawthorne
Oh really?
Rebecca Jacobs
I will say for the most part, people say DAFs. So, you're right on track
Ian Hawthorne
Okay.
Rebecca Jacobs
Yeah, I think, you know, as you said, donor-advised funds are in some ways, you know, I remember when I first came across them, I felt like they were the best kept secret because they're so niche, as you said. And they're so specific, and there's so much to learn once you fall down the rabbit hole, but they are, actually something that is quite useful to a broad kind of range of people for all sorts of reasons. And so, I'm excited for the chance to share a little bit more about what exactly they are, which is a lesson that I had to learn when I first joined the Charityvest community back in the day. But basically, donor-advised funds, mostly, simply speaking, they are tax deductible financial accounts for giving.
So the way that Stephen, the president at CharityVest, likes to talk about this is to say that they're like 401ks, but for giving. So essentially what you can do with them is almost like a charitable piggy bank is you can today put in any amount, get your tax receipt up front that is considered your moment of your, your, charitable contribution. And then, you can invest that if you choose to, you don't have to. And that growth, anything that comes out of those investments is considered tax free growth. And whether you're ready immediately or you're ready in the next year or over the course of a period of time in small increments, you can actually grant that money out to any eligible 501c3 charity in the US. I like to think of them as these tools for people and they can be used at whatever stage you're at in your giving. So, you know, it might be somebody that is just starting out and maybe has one or two charities that they know of that they like to give to you on a recurring basis, well, this is an amazing way to have a consolidated tax receipt for all of that giving automating, you know, you're giving, setting it on autopilot, but then being able to really simply, find all what you need at tax time.
But it also is for larger donors who have a lot of strategic giving needs and like to think about stock giving and all these other complex giving approaches. But basically fundamentally, especially now that we have so much technology around donor advised funds available, it's really easy to get started.
It's really easy to explore them. Many donor advised funds don't have account minimums. And the actual grant processing is quite efficient. So, it's kind of a no brainer to at least sort of explore them, poke around it, and try them. Um, and, and what I like to think of them as is just a way for to get a little bit more purposeful about their giving, to be a little bit more intentional about how they make giving decisions, so that you can actually give more in the long term and give as efficiently as possible, which we believe actually helps every stakeholder in this process, whether it's you as the donor feeling great about it, the charities feeling like they have more awareness and stability of your giving relationship with them, or, you know, the community, the philanthropic sector more broadly.
Ian Hawthorne
Definitely, sounds like there are plenty of advantages. to using these, especially the tax deduction. I am very happy you mentioned that DAFs are not a new development. From what I've read, DAFs have started, I believe all the way back through the forties in community foundations. But we're starting to pick up a lot more noise about them just in the last few years. I'm interested to hear what your take on that history of DAFs as a giving vehicle are, and you specifically represent one DAF or a DAF sponsor, I believe is what they're called, called Charityvest. So could you talk a little bit more about what Charityvest is doing specifically in this field that might be new or different?
Rebecca Jacobs
Yes, absolutely. So yeah, donor advised funds are a legal entity first and foremost, right? Like, that is what they are. In the case, as you said, I am a part of a community called Charityvest, which is a donor advised fund sponsoring organization, which has all of these legal requirements and IRS regulations related to them.
And it is a literal thing that exists. And as you said, has existed for a very long time. I think what has been really interesting about the evolution of donor advised funds, especially recently, is that, basically, for the most part, people came across these legal entities over time, encountered challenges or limitations with them and asked the question, is there a better way to do this?
And so one of these people just so happens to be Stephen Kump, who is an incredible human, also happens to be the person that founded Charityvest and, the current president of CharityVest. He has such a great backstory. Basically, he worked in the philanthropic advisory space for quite some time. And Through that process, he was helping donors give more effectively. And in doing that, of course, you come across all of these different kinds of vehicles that donors can use to make their giving more intentional, which includes things like donor advice funds. And so, he was kind of using these trying to help donors and clients with them.
And then, at one point actually wanted to open one himself for him and his family. And I think, through all of those experiences, he came to ask himself, you know, I wonder if this could be done differently, or if we could do more with donor advised funds, if we leverage technology, which, you know, again, when something has such a long history, that is not necessarily the driving force behind the legal entity. That is not necessarily what the people who started with donor advised funds way back in the day about when they were creating the legal entity. But now we have so much access to technology and, it kind of makes so much more possible. And so, it's pretty cool to see all that has happened since the idea of Charityvest that was just a seed in Stephen's head has come to life and has grown into what it is today.
You know, I think my favourite pieces of what we've done with Charityvest in particular is just how not only has technology made the existing processes more efficient and more accessible to people, you know, talking as I mentioned before about minimums being much lower or non existent, about, you know, it being something that anybody can sign up for anywhere, although things like community foundations are still so critical and pivotal because they have beyond just the legal entity. They have the deep roots and network in local communities but you know sometimes an online platform an online app can supplement these things and help reach more people that maybe wouldn't otherwise know or have the ability to encounter, more localized, networks. So it's been, you know, that side is really cool, but what I absolutely love is all of these other things that we've been able to do as a result.
And so, something, one of the early things that we did are called charity gift cards, which is essentially, you know, if you think about Venmo, like, Instant transfer between people's donor advised funds, which —
Ian Hawthorne
Oh, really?
Rebecca Jacobs
Yeah, so it's actually, some people just use it, to send money to other people that are in the CharityVest network, if you know them and friends are already Charityvest account holders. But beyond that, you can actually send it to anybody and invite them. Into, the practice of giving more intentionally. And so something that I've seen with some of our donors, which has been really, really cool and inspiring. And I've mimicked in my own life is to do that with the next generation. So to involve your family, involve your nieces, nephews, children, and really start to invite those conversations, those charitable conversations with people that maybe you otherwise wouldn't have a conversation with about at the dinner table, you know. But it's an excuse to start talking about these things and what we value even beyond the day to day conversations we have so. Yeah, i've seen some people do that which has been pretty awesome.
In addition to that, we have workplace matching programs. So kind of like leveraging these things This power of donor advised funds with corporate giving, which is existed also for a very long time. And I think every business is trying to figure out how to give intentionally as well and how to engage with their employees in philanthropy.
Through the Charityvest workplace offerings, you can actually offer your employees a donor advised fund as a benefit, just in the way that you might have some other, benefit programs, HSAs, and stuff like that. You can match giving that happens through these donor advised funds and also seed their donor advised funds like you would with a charity gift card.
So, there's, it's kind of a really cool, innovative way to think about workplace giving from a whole other angle as being like a benefit versus just being a thing, an activity that is done. Um, and then the one that we're probably going to spend some good amount of time talking about today is something that's close to my heart, which are our charity vest community funds, which essentially are social DAFs.
So, you know, you think about like traditional online fundraising tools are all very essential and helpful and like, frankly many of them are able to support in ways that a donor advised fund can't because donor advised funds have, as you know, I said before, specific IRS regulations, including the ability to grant, is limited to 501c3s that are registered and have, you know, are up to date.
But for those that are comfortable with those requirements, the community fund tool is quite exciting because it is actually a broad array of different use cases. It can range from being something that is just social. So, you know, if we actually, at one point we had a fantasy football league that created a community fund,
Ian Hawthorne
Oh, wow.
Rebecca Jacobs
And they just, you know, pooled their funding there. And then the winner got to choose which charity it went to. And then that ranges all the way up to. Um, again, you know, workplaces might use these to sort of publicly show and share their giving activities, or to individuals or groups of people that are thought leaders in certain spaces, or have specific local or cause based expertise that want to, either model their giving philosophy, or encourage others to give alongside their mission statement and their giving investment thesis if you will.
So, you know, we have funds. One is called CareWorks Fund, that are based around a very certain set of, you know, causes that matter, values that matter. And then people, whether it's people in their immediate networks or even beyond those immediate networks, can contribute and be part of sort of longer term impact, and we kind of think of these as like evergreen. So they can have multiple rounds. They can last over years versus just a one time fundraising activity.
Ian Hawthorne
I'm so glad you touched on that, and there are a couple things that I definitely want to dig into a little more about those. One of them going back to DAFs broadly, and particularly Charityvest, you mentioned passing it on to the other generations. And then, you've also mentioned in the community funds, various funds that have been made, like that FantasyFootball one, for instance.
Fantastic example. I am so surprised that is a thing, but I totally get it now. That's actually really, I would be in one of those leagues. What has the reception been from younger people? Because I know that's a big discussion in the non profit space is, you know, how do we get younger generations to give more? Every generation there seems to be this sort of cycle of how do we reach them. Have you noticed an uptick in younger people on these types of platforms? Or how are they using them alternatively?
Rebecca Jacobs
Yeah, so I think that, you know, I think we will continue to need to innovate as the newest generation comes into philanthropy. And I think there's that there's, you know, talk in many sectors of this great wealth transfer, what that will also happen in time with that of like the next generation is going to probably inherit quite a bit of wealth.
And, a very key piece of that will be, for them, at least they will prioritize using any of those resources for philanthropic endeavors. And so we definitely see, in many spaces with financial advisors, for example, it's becoming increasingly critical that, the giving conversation happens as a material part of the overall financial conversation.
So it's definitely top of mind for young donors. And it's something that is going to continue to be of importance. I think that as far as how the younger audiences have engaged with the charity vest and all of these tools, I think they, it depends how you define younger. I think we're,
Ian Hawthorne
Mm hmm. Yeah.
Rebecca Jacobs
I would say, you know, our early supporters were absolutely people that are all of my favorite, people. They're super fans in a way because they discovered this piece of technology and they help us. They call us out. They ask us to make improvements and,
Ian Hawthorne
Oh, wow.
Rebecca Jacobs
They are regularly, you know, holding us accountable for things. And so I think that maybe there's so much that this next generation is going to be thinking about, but when it comes to philanthropy, something that Stephen recently spoke about was this idea of even the way that they learn about philanthropy is different with videos like Mr. Beast out there. So it's an entirely new generation, but I think the core piece of it is that they will not settle for anything but their values and living those out very, very much in everything that they do, including their philanthropy. And so, I think that that is exciting because that means that things like the CharityVest platform will continue to have to evolve to meet those needs and to serve, people in the best way possible.
And so, yeah, I think, I think as far as engaging the next generation, I don't really know how much work has to be done to engage them. I think they're actually incredibly engaged and are going to be sort of defining the landscape in a new and exciting way.
Ian Hawthorne
Yeah. I'm actually very happy to hear that. I think it's so interesting that you say that they are very proactive in giving you guys feedback as a platform. I would think that that's a huge advantage to maybe a more agile online platform like CharityVest versus some of the more legacy DAF providers, right? Because you can change on the dime, or maybe not on the dime, but you know, faster than maybe some might. You're agile, right?
Rebecca Jacobs
You mean, I'd like to think that we are. I have very little to do with that. Our, our team and you know, the, the team that is powering CharityVest, is, is so much a part of that. We recently, we're joined, we've joined forces with Foundation Source. So we kind of the best of both worlds in a sense. They have been around for a long time. They know what they're doing. They know how to serve, donors in a really positive way and make the experience of connecting with people top of mind. Whereas, the sort of thing that the CharityVest, technology and team was able to bring to the table was, just this, as you said, the ability to pivot based on feedback that we hear and continuously learn and continuously evolve.
I think, although, yes, that kind of feedback can be more challenging to larger organizations that have been around for much longer. There's probably going to be a lot of beauty in collaborations and partnerships as a result of that And I think that's going to be really exciting to see over time Hopefully as much as we love that community funds were kind of something that we brought to life and brought to the world. We hope that it's not just a one off innovation. We hope that these things become available and accessible through all of the platforms that are out there and all of the different donor advised funds. Because you know, the more people that are doing it, the better that it is for philanthropy and for the world.
So yeah, I think, for sure, being technology first makes a huge difference, but, it also, is exciting to bring something to the world and then also have it last and stand the test of time even beyond it being innovative. I think a real win is if it is no longer just innovative, it just becomes the new standard.
Ian Hawthorne
The norm. Yeah. yeah, What one other thing that struck me, and this was really interesting was just the variety of ways people seem to use these community funds. Cause you mentioned, obviously I'm going to keep coming back to the fantasy football one, because I just love that example.
But then you also mentioned ones that are structured in a way that almost makes me think of like, I don't want to say a hedge fund, but some sort of asset management where they have this thesis, the sort of investment thesis you mentioned, but it's philanthropic, right? And so this seems to be a really flexible platform where people can sort of experiment with their different philanthropic approaches, whether it's treating philanthropy like a business an award for a tournament or saying, you know, Hey, I have this really great idea about how to allocate these funds. Everybody come join me. Right.
So if you could just talk a little bit about the diversity of how people are using these, maybe how many funds there are, what the whole landscape looks like from CharityVest angle. That'd be great.
Rebecca Jacobs
Yeah, for sure. So, you know, talking about Innovation and exploring and trying new things. We, we launched this late 2023. So it very much is still new in our, in our minds and hearts. And, the beauty of it is that it has actually slowly grown in a very organic way. And we think that that is way more, you know, of a testament to how people are excited to collaborate in philanthropy now.
And that, that is kind of the thesis that we were testing. We're like, Hey, if we put this tool out there, are there people that are like craving this opportunity to give in, in collaboration with others? And, the answer was yes, and it is continuing and is growing over time. So it has been very, very cool to see.
I remember, and we'll always hold very close to my heart our first few brave soldiers that joined us for the launch and were willing to put themselves out there alongside us with their funds and, you know, over time now, as you alluded to, it's, it's kind of grown a story of its own beyond anything that we could have intentionally curated although we still love to partner and love to talk through and strategize, like, you know, what could you build here?
How could we help with that? And that does tend to happen with some of our more, as you said, almost like investment funds. But, you know, we've had close to 90 community funds since we launched that have had supporters. And that's kind of how I measure, if it's out in the world if somebody has actually put money into it, although over 150 have been created, which means 150 plus people had an idea and wanted to start and try.
And so, that is also very, very cool to see over 1500 supporters across all of those. So, you know, the range of the volume of supporters per fund varies quite broadly. And it again, depends on the types of the funds and what they actually look like. But overall we've had over 1.7 million contributed so far and then over 1.2 million granted. And that also to me is quite exciting because that means that the money that is going into these community funds is moving through them. And that was also a really big goal that we had through this was how can we mobilize capital?
And again, talking about how can you extend what is possible with the donor advice fund? How can you actually use it as a way for people to be moving money more intentionally through them? And so, over 180 or so charities have, benefited and received grants from these community funds which has been, has been pretty cool.
And talking about the different types, there are some that for certain occasions that people use, so, it might be like a wedding or a memorial or sort of, one step removed from like, fundraising for my birthday, which is also a totally reasonable thing that is possible with a community fund, but often what we find is people are using these moments as an excuse to start building an evergreen fund.
So this is the beginning of our lives together. And so we want our loved ones to participate and help us kick off a fund that we will be continuing to contribute to for the rest of our lives. And we will share with you all what we are doing with it, and involve our community in what our giving is going to look like as a family.
All the way, yeah, again, that, that fantasy football one is an awesome example. It was one of my favorites in the early days. And even to like values based groups coming together. So it might be religious organizations. It might be people that are motivated around the same set of values are really driven towards certain causes that are all together, like effective giving movements and any sort of community really is, this tool is the financial anchor for that.
So we do not have very many community tools. Like there isn't a way for you to chat or anything in the actual community fund. It's more of the home of like, okay, this is the landing spot for the money. But because of this money, hopefully a community exists around it and continues to grow around it and kind of sets its own tone and has its own dynamic.
And then yes, with the more, leader driven funds, we call them philanthropic syndicates, they're usually, you know, it's either a small group of people that are making the decisions around what is funded based on this sort of outline that they presented in the fund, or it can be a collaborative, so a few different funders that are coming together, and making decisions based on their own parameters.
Ian Hawthorne
Really seems like community funds have done the job of creating communities. From everything you've shared. It's really, I'm, I don't want to say I'm surprised because it's in the name, right? But to think that this level of community could be either cultivated or at least caught on this type of platform is really interesting to think of from a philanthropic perspective, too. And I'm glad you mentioned, the pass through rate too. Because as, as someone who's been following DAFs, I know that that's something these vehicles broadly have received a lot of criticism for because their model is a, I've heard it mentioned as a give grow grant model. And there's been a lot of discussion about people basically giving and growing, but then there being no requirements to grant like a foundation. But it seems like community funds are doing an extremely effective job, giving, growing, and also granting, quite, quite highly. Do you think that has any difference from how individuals are using community funds, either on your platform or more broadly? Like, do you think they're extra effective at that for any specific reason?
Rebecca Jacobs
That is a great question. I think so I don't, need to dive too much into the whole philosophy behind some of those criticisms which are in many cases warranted, but when I think about donor advice funds, there are those three activities give grow grant.
Very often if there is a delay on the grant side for an individual. It is because that individual has a plan in place. Talking about giving being purposeful, maybe somebody had, a year where a tax efficient gift made a lot of sense and they actually have a five year plan for how they want to deploy those gifts and get them to the door of the charity, which In their case, probably makes a lot of sense.
They likely have relationships with these charities and there's a lot of benefit on both sides. On the community fund side, that is usually communicated upfront. Whereas, in a private DAF, there's no like, mission statement, right? Like not every single donor advised one has to write like, Oh, this is what we're going to do and this is why we're doing it and this is why we gave this year, versus a community fund is very transparent in the sense that there's like an about page where the people that are running the fund, the fund managers, as we call them, they are writing out, what is our grant making process going to look like?
What is, you know, the actual structure of the fund, like, and, even beyond that, we have an entire ledger that all of the supporters and even the public, if this is a public fund, are able to look at and see the sort of historical grant making of the fund. And so, in that sense, really when somebody's going to make a community fund, it's because their intention is to grant. That is the goal that they go into it with. Right now we actually don't have the ability for donors, or fund managers to invest these balances. So they're truly Skipping that investment step and just
Ian Hawthorne
Oh, okay.
Rebecca Jacobs
Give to grow, and, or sorry, give to grant and that decision was made a little bit just from a structural and like, how can we get this out there as fast as possible?
And this was the fastest way to go. I think, for sure, you know, there's benefit to some of these funds kind of becoming like endowments because then they can grow their base of funding and continue to give the growth for a much longer period of time, which is quite cool to think about, but the current state of these community funds at least, you know, somebody is creating one, coming into it, and it might be that they're going to be granting these funds over a six month period, over a 48 month period, whatever it might be, but they usually have the whole fleshed out up front.
And they must in order to solicit support from others because they're, they're kind of telling a story as part of it. And so I think that's really what it comes down to, is like on the individual level. I am telling a story to myself, but I'm not necessarily telling a story to the world. And so it makes sense in my head at my advisor and I know it makes sense.
My, you know, the DAF sponsor and I know it makes sense. It is absolutely a path that will end in charitable giving. Like there's no scenario where I'm getting the money back at the end of the day. But, on the community fund side, it's just a more public experience. So in that sense, you know, we talked about the young generation holding us accountable.
Like everyone is held accountable in that space. And, it's. I mean, so far we've seen like no instances of that being, people deviating from that because it, it is like, you know, everybody on CharityVest will be able to see if you said that you were gonna grant to a turtle charity and you went and you, you granted to a raccoon charity , like, we're all gonna see that and call you out for it.
Ian Hawthorne
Yeah, I'm really glad you mentioned that point about individual donors, right? Because it makes a lot of sense that a community foundation or a community fund would be more openly accountable and transparent, but it is, it makes a lot of sense to that from your perspective, an individual might have their own private plan that is not communicated in the giving data, right? And I know that a lot of criticisms of DAFs have come from more external people looking at the data saying, you know, where is the money going? Why isn't it moving? But I'm really glad we were able to get in your perspective on this as an insider because that makes a lot of intuitive sense the way you framed it. But especially with community funds being open, it is interesting to note how quickly they are moving that money, how effective they are at it, and how centered around a really open and transparent thesis they are. Now, I want to pivot a little bit because we've been talking a lot about who's using these funds, right? I'm also interested in who's receiving these funds. What has been the feedback from non profits and recipients of these types of funds? Either community funds or DAF gifts in general, but I'm really interested in how they receive them, what are kind of the logistics of that, and what's been the reception?
Rebecca Jacobs
Absolutely. So, I think, you know, as somebody that is working on the DAF side of things, I can't, I don't want to say that I speak for the experiences of non profits because I don't think I have the full spectrum of experiences, and I'm sure that what they share back with us is not going to be their full experience. And I'm sure that there are plenty of challenges that they face. And so I don't want to discount any of that. But I think that, part of our responsibility is to continue to learn from them as well. They're not our quote unquote clients, but they are our stakeholders. And, everybody in this process is kind of on the mission to support charities, right?
Like the, the DAF sponsors exist because there is a need for more structured giving for donors. And donors want give because they want these charities to thrive. And so ultimately we are all kind of working towards the same goal, the same shared mission. And, and I think what, what has been interesting to see, you know, there's definitely a range of, of reception.
I think recently, there has been a lot of work and a lot of movement towards nonprofits, feeling a sense of ownership over this DAF sort of, experience relationship. I think at one point the predominant, sort of thought was a little bit of like, oh DAFs are this black hole. We don't know anything about them. But the more people that I speak to, the more I realize it is just just like individual donors, right? Like many people, my friends and family, most of the time don't know what I do, and they think it's like, I would have to sit down with them and have a coffee and chat for like half an hour to kind of explain what it is that these donor advice fund things are, and nobody is, you know, free of that.
It is a really complex niche thing. And so, helping nonprofits learn about what donor advice funds are and how they , um, how they actually work for them and can work with them instead of being just like this, sometimes we randomly get a check in the mail from this random DAF sponsor and we don't know anything about it.
I think that is such a game changer. And I've seen so many nonprofits actually lean into that and get really excited about that. And it's changed their dynamic. I think, some beautiful things that have come out of that are, DAF Day, for example, is a thing that exists now, which is so cool.
Ian Hawthorne
Oh, really?
Rebecca Jacobs
You definitely should check it out. It's started by a group called Chariot. They're lovely people, and, basically, DAF Day is, you know, it's a little bit about donors, it's a little bit about, um, DAF sponsors, but it's a lot about charities. Because it gives these charities permission to have conversations with their existing donor base and perhaps even future donor base about charitable giving in the context of DAFs, and, DAF donors are often quite engaged with the charities that they give to.
They have long lasting relationships with them. They can fund in responsive ways. So, if there is a massive funding need, well, they've likely already committed funding to charitable causes through their donor advice fund. And so in these moments where certain charities have additional needs, their DAF donors might be a great place to start.
And so I think it's really about shifting that, that perception of like, DAF is another thing on my list that I have to deal with and try to figure out to being like, actually, no, this is a driver of growth for your organization as well and so groups like DAF Day are doing great work to help provide resources to bridge that gap and help charities feel a little bit more connected to what these things that our DAFs are all about and how they can leverage them for their own organizational purposes. um, Something that actually, our partners, so I, I currently work and represent FoundationSource now as we are the team and the technology that powers CharityVest and, something that we're now offering are branded, DAF programs for non profits and, and sort of the impetus for this was actually, you know, many non profits would benefit from kind of curating their communities of donors and helping them to give in more intentional, purposeful ways.
And so whether that is through a DAF program that is under their charity's name, logo, everything, where they're inviting people into the DAF process and being a part of that, or through community funds. And we can talk a little bit about what that looks like for a charity versus, for individual donors, but, you know, bringing in these collaborative giving tools into their broader fundraising toolkit, is kind of another cool way that DAFs and nonprofits can work together because ultimately, again, if nonprofits are not benefiting from donor advised funds, then why do they exist?
Ian Hawthorne
Yeah, no, that makes a lot of sense. I, I can't fight the sort of non profit impulse in my brain that DAFs seem to be a really good tool for donor segmentation. Am I wrong in this? Because it seems like, like you mentioned, DAF givers seem to be inherently very passionate about what they're giving to very sort of self motivated. And so I think the idea, like you mentioned, of being able to tailor your own sort of DAF groups for your own non profit or having them be sort of a first line of attack when you're going on a fundraising campaign or something. This seems like a really important data point that they've already self selected into by having a DAF or by being a member of this DAF community.
Rebecca Jacobs
Absolutely. It is so interesting to see DAFs as a concept. Like, whether you came to DAFs because you were already a very active giver or because you started using a donor advised fund, like myself, when I joined CharityVest, I created a donor advised fund account.
Either way, it actually fundamentally impacts your behavior around giving in a very positive way. And it shifts it from being a responsive, reactive like, Oh, I bumped into somebody at the grocery store. I want to give a little bit here to, Oh, I'm a giver. Like I am somebody that does this.
This is a part of my sense of self and identity. And it absolutely feeds into, as you said, this sort of segment of donors. for nonprofits that are quite engaged and hopefully, excited to partner and give and be a, be a deeper part of the, the nonprofit.
Ian Hawthorne
That psychology shift is really interesting that you mentioned. I want to shift now to just a little more specifics about some of the nonprofits that give. You have some data that you've shared with me privately about the arts and cultural nonprofits benefiting from CharityVest. Now, AMT Lab is an arts focused podcast and platform. And so I'm interested to know what, what is, what did the arts look like on this platform? Are they making use of this? Are there any examples of really successful arts and or cultural community funds that have been used? Or is there room for growth in this area on DAFs?
Rebecca Jacobs
Absolutely. I think, I was taking a look at this data and as I was telling you, it was really, it was a really great opportunity for me to dive a little bit deeper, into the granular data when it comes to community funds, because we often, when we're reporting for our annual report, we are speaking from a sort of broader giving experience for all of our DAF donors. So, when I did take a look, it did quite similarly reflect our more broad giving trends. And unfortunately there is a lot of room for growth when it comes to the arts. And you know, maybe that's a great thing, actually. Maybe it just means that there's a huge opportunity here. Because yes, you know, for the most part, like the human services and all of, all of the things that you, that, that most people, let's say, would think of when they are asked, Oh, name three charities. You know, they're, they're not necessarily thinking about the arts, but, it, it is such a critical part of our nonprofit infrastructure. And, right now I think as far as grants go from community funds to arts and culture charities, it's, you know, by volume and, and by dollars given, it's around 2 3%, which is, you know, it would be awesome if it was much, much higher than that.
I've seen some really meaningful memorial fund, community funds, where the individual has actually quite a connection to the arts, where that has actually been the focal point of their giving,
Ian Hawthorne
Interesting.
Rebecca Jacobs
or the funds giving. so that's kind of been a place where I've seen that come up and I think is really special, but, there's so much room to go even beyond that and to start thinking, to that other side of the spectrum, as I'd mentioned before of the, leaders that are kind of driving some of this artsgiving I think would be really cool to see and hasn't taken root quite yet, but there is absolutely opportunity for it.
Ian Hawthorne
Yeah. All the more reason that if there are any arts managers out there listening to this right now, you know, educating yourself even more about DAFs and DAF giving is clearly a, an area of opportunity.
So, definitely have that bet.
So could you talk a bit about the future of charity vests specifically and also anything that you see that might be really exciting on the horizon for daff giving broadly?
Rebecca Jacobs
Absolutely. I think the biggest change in CharityVest's life, if you will, um, recently was that in October of 2024, we officially joined forces with Foundation Source, who is, is a philanthropic sort of collection of software and services that's are all pulled together to support the range of giving experiences and giving vehicles.
So everything from private foundations to donor advised funds, planned giving, and beyond. And so, the really cool thing about this partnership is that basically with Foundation Source, you know, we talked about CharityVest was an innovative sort of technology driven force, and that was incredible and has a lot of positive pieces to it, but it also has some limitations and a piece of that is, is kind of achieving our central mission, which is to catalyze as much giving as possible.
And so, through this partnership, through the backing of a larger organization that does have much experience in the field, we're actually able to hopefully through partnerships, reach a lot more people, whether it's partnering with financial advisors, and offering deaf programs through their firms, partnering, as I mentioned with nonprofits. Really just kind of extending as I alluded to before is like taking this technology, taking some of these innovative approaches to donor advised funds and how we've pushed the envelope of what is possible with the donor advised fund and kind of reaching our super fan audience who we adore, but, trying to put it into the hands of every American, to make it possible for everyone to benefit from a donor advice fund for every financial, conversation with your advisor to include a conversation about philanthropy, I think is kind of our dream is to have, that giving conversation be a central part of dinner table talk, and it be something that people are excited to share and excited to talk about, and it not necessarily be this, quiet thing you do on the side that you don't really know how you do, but, yeah, just for people to be really purposeful with how they give, and so we're, we're really excited about this relationship with Foundation Source, all that they have to offer in philanthropy and, how we can work alongside them to achieve that, to help, all these people.
partners, all these channels of reaching people, to enable them to leverage donor advice funds or really whatever else it is that they need to achieve their philanthropic goals at whatever stage that they're at. so yeah, that's, that's a part of it.
And then sort of more broadly, what I've seen from DAF giving is that, you know, as, as we've discussed, it's like on the rise. It's constantly changing, evolving, and that is so exciting because that just means that there is so much more to come, and that, we're at the beginning of something really, really exciting to be a part of, and I think what I'm most inspired by are all of this work that is happening a grassroots level in communities to redefine what it means to be a donor advised fund, what it means to have a donor advised fund. What it means to give from a donor advised fund or to receive funds from a donor advised fund. You know, because technology has changed the game a little bit. Now there's a lot more space for these conversations. And so, groups, as I mentioned before, DAF Day movement, having charities now become leaders and Advocates for donor advice funds in ways that actually serve them well and help them achieve their goals, groups like Philanthropy Together that are actually like looking at the whole sector, trying to figure out what is this thing called collective giving, what are all of the, who are all of the players, how do these, different collective giving models work.
Look and feel and, just, you know, all of the folks out there that are even the ones that are experimenting with our community funds, I think they're, they're also so cool to see. And so fun to watch as, it's a, as you said, quite an old space in some respects, but it's also quite a new opportunity and a lot of people are having fun with it and trying things. And I think over time we'll continue to see how that will shape up and, and how both in the, at the institutional level as donor advice funds scale and are reaching a broader audience, but also at the grassroots level, how we can start to see all new rules get set and made. It'll be, it'll be pretty fun to, to check back in a few years and see, see where we land.
Ian Hawthorne
Definitely. There's some very exciting stuff happening in the world of DAFs and seems to be the world of philanthropy broadly. I'm really interested in that whole psychological shift that you mentioned, the whole cultural. It seems like you're sort of one piece of a larger movement towards a different culture of giving, which I think is really inspiring to think about.
Rebecca Jacobs
Absolutely.
Ian Hawthorne
With that being said, Rebecca of CharityVest and now FoundationSource, thank you so much for taking your time out of your day to speak with me.
Rebecca Jacobs
Absolutely. Thank you. I really appreciate being here. And I think it is so fun and exciting to talk about and share a little bit more with your community because I think you all are also doing really great work in the education space. And we hope that, if nothing else from this conversation, somebody Googles what a DAF is and starts to get curious, and learn and explore themselves and start to try stuff.
Ian Hawthorne
Absolutely. You hear that listener start Googling, please. Thank you so much for talking with me today.
Rebecca Jacobs
Yeah, thank you.