How DAFs Can Help Clients Innovate

By Jasper van Brakel

Experiment with new ways of giving that challenge philanthropy’s orthodoxies and directly address systemic inequities.

The ongoing debate over donor-advised funds—are they a $142 billion unwarranted tax dodge that results in wealth hoarding or a boon to nonprofits and donors alike?—has obscured what for many donors is the most compelling use case for DAFs: as a tool for experimenting with new ways of giving that challenge philanthropy’s orthodoxies and directly address systemic inequities.

This is especially the case for clients who are attuned to current critiques of philanthropy and may be hearing negative messages about DAFs. It’s well worth countering those messages, because for clients who see themselves as innovators and want to learn and grow as philanthropists, DAFs offer advantages no other philanthropic funding vehicle can match:

•  Their minimal operating restrictions allow for experimentation with creative giving structures that maximize impact;
• Their flexibility gives mission-aligned DAF sponsors the ability to offer ad hoc collaborations with other donors, such as pooling funds to seed potentially transformative projects; and
• Their low overhead and simplicity make risk-taking more palatable, opening up opportunities to maximize impact from invested DAF assets as well as granted funds.

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