The Practical Planner Podcast
Episode: Charitable Giving & The Role of DAFs with Adam Nash
Date: November 18, 2024
Hosts: Thomas Kopelman & Anne Rhodes
Guest: Adam Nash (CEO & Co-founder, Daffy)
Episode Overview
This episode explores the transformative role of donor advised funds (DAFs) in charitable giving and estate planning. Hosts Thomas Kopelman and Anne Rhodes welcome Adam Nash, CEO and co-founder of Daffy, for a deep dive into how DAFs empower individuals and advisors to give more intentionally, efficiently, and strategically—both for immediate impact and long-term philanthropic goals. The conversation offers practical insights, advanced planning strategies, and actionable ways for advisors to help clients achieve their giving aspirations, especially during major liquidity events or periods of fluctuating income.
Adam Nash’s Background & The Origin of Daffy
[00:11 – 03:34]
- Adam Nash is a renowned fintech leader, having previously served as President/CEO of Wealthfront and held key roles at LinkedIn and Stanford.
- Daffy (Donor Advised Fund For You) was founded to modernize and democratize charitable giving, using the latest fintech advancements.
- Nash notes a gap in innovation: “Where was giving? I mean, and giving isn’t just a normal financial task… It’s a way to live your life.” (Adam Nash, 02:08)
- There are approximately 60 million U.S. households giving to charity annually, but less than 1 million have DAF accounts—Daffy aims to bridge this gap.
Key Stats & DAF Accessibility
[03:34 – 05:14]
- Industry DAFs have median balances in the tens of thousands, but “that doesn't tell the whole story,” as both massive and small accounts exist.
- Daffy’s minimum contribution is just $10, and accounts under $100 are free to start.
- Daffy accommodates all sizes, from a $6,000 median stock gift to individual contributions as high as $12 million.
- Quote: “Giving is something that people mostly do on an ongoing basis… We tend to support the same organizations year in, year out.” (Adam Nash, 05:05)
The Benefits of Donor Advised Funds
[06:00 – 10:15]
- Segregation of Purpose: DAFs create dedicated accounts for giving—like 401(k)s for retirement or 529s for education. This segmentation improves follow-through and allows compounding.
- Immediate Tax Deduction: Contributions are tax-deductible in the year given, even if you haven’t chosen recipient charities yet.
- Donating Appreciated Assets:
- Donors receive deductions for full market value and avoid capital gains, enabling greater net giving.
- “If you donate appreciated stock... you get a deduction for the full market value... and you never pay the capital gains taxes.” (Adam Nash, 07:17)
- Most charities can’t accept stock, ETFs, crypto, etc.—DAFs act as an intermediary.
- Organized Recordkeeping: Easy tracking of receipts and historical giving.
- Strategic Giving: Enables donors to act quickly in response to crises (e.g., Maui fires), or to plan giving with intentionality for maximum impact.
- Advisor-Client Opportunities: DAFs provide a framework for meaningful conversations about legacy, multi-generational giving, and integrating philanthropy into comprehensive financial plans.
Tax Strategies, Timing, and Optimizing Charitable Deductions
[10:15 – 17:30]
- Advanced planning involves pairing high-income years or liquidity events with large DAF contributions.
- “Pretty much 99% of people who are going to sell a business should use a donor advised fund before they sell that business.” (Podcast Host, 12:30)
- DAFs let donors “front load” several years of giving in a single high-tax year, maximizing itemization and deduction use.
- Contribution of private business shares (with special rules) is possible.
- Notably, only 14% of Americans itemize, so “the donor advised fund is the way to make sure that they do.” (Podcast Host, 12:55)
- Nash emphasizes that DAFs remove the pressure to make huge giving decisions quickly, e.g. when a windfall hits late in the year:
- “For many people that unlock code is just realizing that they don't have to make this incredibly large financial decision all at once. The donor advised fund frees them up to actually plan for the future.” (Adam Nash, 13:02)
- Regular (recurring) giving supports the sustainability needs of charities and allows the donor to avoid stress from income fluctuations.
Automation, Recurring Giving, and DAF Technology
[21:18 – 23:03]
- Automation is critical: “Automation is your friend... we're just not good at sticking to plans. And so that's the place where you can actually let technology help you.” (Adam Nash, 21:18)
- Daffy’s platform supports recurring contributions and donations via stock, cash, or bank transfers for easy, systematic giving.
- Recurring donations can be scheduled for significant dates (e.g., birthdays, anniversaries, memorials), enhancing meaning.
Overcoming Barriers: How to Decide Where to Give
[23:03 – 28:35]
- Giving typically involves two questions: "How much can I afford to give?" and "Who should receive it?"
- DAFs separate these questions, reducing decision paralysis.
- Three main inspirations for philanthropic direction:
- Local: Daffy offers geographic tools to help discover area nonprofits and view public data about their finances and efficiency.
- Social: Users can connect with friends/family on Daffy, see each other’s giving, and share notes/testimonials.
- Campaigns: Matching donation campaigns stimulate and amplify giving; Daffy enables donors to offer matches from their funds.
- Nash advises donors not to pressure themselves to “solve giving all at once.”
- “Even famous billionaires... spend years figuring out how to have the most impact.” (Adam Nash, 27:29)
Investment Strategies within DAFs
[29:46 – 32:58]
- Many donors aim to grow their charitable funds over years before distributing, using various investment options.
- Daffy offers over 460 low-cost ETFs, index funds, ESG and crypto portfolios—even the option to build custom portfolios, allowing gains to compound tax-free for eventual distribution.
- “There’s something great about feeling like those gains go to charity, right? It’s just a wonderful feeling.” (Adam Nash, 30:13)
- Advisors can be formally added to Daffy accounts, supporting collaborative planning.
- Host observes: for young, high-net-worth clients, early contributions can multiply over time into major philanthropic impact.
Key Considerations for Business Owners
[32:58 – 36:52]
- Important legal/tax caveats:
- If you have a C corp with QSBS eligibility, a DAF is not ideal (as QSBS already offers capital gains exclusions).
- Donating illiquid business interests requires careful timing; if a liquidity event doesn’t occur within 5 years of donation, a 10% tax is levied.
- Quote: “You don’t want to donate a few million dollars and all of a sudden have a $300,000 tax liability because you never had a liquidity event…” (Podcast Host, 33:51)
- Always coordinate with CPAs and advisors to optimize for both tax efficiency and broader financial goals.
Additional Use Cases & Strategies
[34:59 – 36:52]
- Portfolio Rebalancing: Donating appreciated assets through a DAF can help rebalance portfolios and reduce concentrated positions without incurring big tax hits.
- “Take those securities that have run up and donate them… it’s much more tax efficient.” (Adam Nash, 35:15)
- DAFs help overcome behavioral tax aversion, making it psychologically easier to realize appreciated gains when the impact goes to charity.
Final Advice & Takeaways
[37:01 – 38:22]
- “Just get started.” Don’t be intimidated; DAF platforms like Daffy track and gamify annual giving goals and make the process easy and family-inclusive.
- Daffy supports adding up to 24 family members and advisors per account.
- Quote: “Once you do it, you realize that this isn’t actually rocket science… all those savings actually go towards money put aside for charity, which is phenomenal.” (Adam Nash, 37:01)
- The empowerment of agency—choosing when and how to fund giving—benefits both donors and recipient organizations.
Memorable Quotes
- “The donor advised fund was always on my list of kind of amazing financial products that most people have never heard of.” (Adam Nash, 01:43)
- “Giving isn’t just a normal financial task... it’s a moral and ethical question, it’s a way to live your life.” (Adam Nash, 02:08)
- “Every account is segmented for that goal... it applies to retirement accounts and it applies to giving and it does lead to more efficient giving.” (Podcast Host, 10:15)
- “For many people that unlock code is just realizing that they don’t have to make this incredibly large financial decision all at once. The donor advised fund frees them up to actually plan for the future.” (Adam Nash, 13:02)
- “Once you have this magical account where you can donate stock, get this incredible tax advantage and then see the money grow... a lot of problems start looking like nails.” (Adam Nash, 32:21)
- “My big piece of advice is just to get started.” (Adam Nash, 37:01)
Recommended Timestamps
- 01:43 – Adam Nash on why he started Daffy and the lack of attention to giving in fintech.
- 05:05 – The diversity in DAF account sizes and how giving varies by life stage.
- 07:17 – The powerful tax benefits of donating appreciated assets via a DAF.
- 12:30 – Using DAFs for major liquidity events or high-income years.
- 13:02 – How DAFs take pressure off making immediate giving decisions.
- 21:18 – Automating giving—why technology matters.
- 23:51 – Three ways people find causes and charities to support.
- 30:13 – How investment growth inside a DAF can exponentially increase charitable impact.
- 34:59 – DAF strategies for rebalancing portfolios and alleviating concentrated risk.
- 37:01 – Adam’s closing advice: Start now; make giving a lifelong, family-inclusive practice.
Episode Tone
Conversational, practical, and deeply mission-driven—both guests and hosts emphasize approachable, actionable tactics for advisors and clients, while also highlighting the meaning and satisfaction derived from intentional, structured generosity.
For more information, visit daffy.org or follow Adam Nash on X (Twitter) and LinkedIn.
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