June 19, 2018

For Donor-Advised Funds, Investible Options Climb with Demand

By Jessica Pothering | June 19, 2018 | ImpactAlpha

There is $85 billion sitting in donor-advised funds, waiting to be put towards philanthropic causes. Increasingly, the dry powder in these DAF accounts is being channeled towards impact investments as well.

Fidelity Charitable, the nation’s largest provider of donor-advised funds, has seen the share of this capital committed to impact investing increase 110% in the past year. In the first quarter of this year, impact invested “DAF” assets stood at $856 million, Fidelity Charitable says. All told, Fidelity Charitable managed $21 billion in donor-advised fund assets from 180,000 donors,

Tax-advantaged donor-advised funds have traditionally been used for grant-making. But an increased number of DAF providers enable donors to direct mission-aligned investments from the accounts as well.

“The flexibility offered by donor-advised funds also allows for diversification, using a range of investment strategies, liquidity, time horizon and asset classes,” MicroVest’s CEO Gil Crawford and Timothy Freundlich, the President of ImpactAssets, wrote in a guest post on ImpactAlpha in March.

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