Once an intriguing, but altogether mysterious, philanthropic vehicle for many advisors, donor advised funds have steadily grown in profile over the last decade. This dramatic come up is perhaps best illustrated by the emerging presence of the ultimate fintech stamp of approval—dedicated applications or dashboards that can be incorporated into advisors’ tech stacks.
Charityvest, a solution focused on increasing the accessibility of DAFs, particularly as vehicles for collaborative giving, is one of the most recent services to throw their hat in the advisor ring (or add their app to the stack, if you prefer).
Founded by former philanthropy advisor and consultant Stephen Kump—who based on his experiences behind the philanthropic curtain believed that purposeful giving would be held back if someone didn’t step up and create better technology—Charityvest has run successfully for several years as a purely direct to consumer service. However, when the upstart Founders Arena WealthTech Accelerator recently announced the first cohort of participants, Charityvest was among them. In a conversation with WealthManagement.com, Kump confirmed the service is looking to leverage the tools provided by the Founders Arena Accelerator—largely strategic contacts and relationships—to help them extend into the advisor space, a process they're currently only a few months into.
At a glance, Charityvest’s offering appears very similar to that of Adam Nash’s more high-profile Daffy. Both look to ease client access to DAFs by offering access to prebuilt investment packages (the clients still get to direct any charitable distribution of the invested funds), all managed via the ubiquitous dashboard. Though, while Daffy largely leaves its investment options at that, Charityvest does offer some more knobs to turn for advisors looking for something more customizable. That customizability comes at a cost however, as while both services charge monthly subscription fees, Charityvest adds a sliding administrative fee based on total percentage of invested assets (albeit significantly lower than that charged for similar DAF access at larger institutions).
Where Charityvest looks to differentiate itself is via collaborative giving (although competitors aren't far behind), according to Kump. “I believe purposeful giving is what DAFs do best, and one of the most rewarding aspects of purposeful giving is community.”
They are looking to bring this sense of community to DAFs by attempting to turn them social (and potentially viral) through what they call ‘community funds’—users can generate searchable, brandable web pages to which anyone can contribute (no subscription necessary for contribution). The total pool of funds is publicly visible, but individual donators still receive a private tax receipt for the amount they give. Administrators designated at the fund’s creation have ultimate grantmaking power, but all contributors can see the recipient—and amount—of each grant.
Kump explains the elevator pitch as “The power of a DAF with the ease of GoFundme or AngelList for charity.”
When asked where advisors are meant to fit into this ecosystem, Kump likens the current state of DAFs to that of 401(k)s in the 1980s. “They’re fast growing, but complex enough to need someone to explain them. You can’t get someone from zero to one trivially, which is why we feel advisors are so important to our mission.”
According to Kump, “Advisors often struggle most when it comes to helping clients determine what’s meaningful to them. We give advisors some conversation starters and low hanging next steps to ease this conversation, and the tools to act on them.” Charityvest’s ‘menu’ of funds purports to not only lower the price of entry, but also remove some of the sticker shock for advisors who may otherwise be overwhelmed when facing the full gamut of available DAF options.
‘Where we’re headed with advisors and collaborative giving ties into the macro trend of advisors as a commoditized service.” Kump said. “Advice surrounding giving can play an important role as a differentiator for an advisor, allowing them to create value at a deeper, more personal level.”