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Barron's: Using Donor Advised Funds to Invest for Impact
Donor advised funds, or DAFs, are set up by nonprofits to allow investors to make donations into an investment fund and get a tax break for a charitable contribution as the assets in these vehicles are eventually given to qualified nonprofits.
But some wealthy individuals and families want to make sure their donations are generating positive outcomes for society and the planet from the get-go, before the money is granted to charity.
The Giving Fund, a DAF managed by ImpactAssets in Bethesda, Md., is one nonprofit that allows donors to invest their tax-privileged assets into a range of socially responsible investing strategies. This may mean investing in mutual funds that buy stocks or bonds of companies with the best environmental, social, and governance practices, or it may mean investing in a private equity fund focused, for example, on affordable housing.
