Hey,

Alison here!

Two things to know about me: I love geeking out about personal finance. And I love supporting causes I care about. Today, I want to talk about a cool intersection of the two: Donor Advised Funds, or DAFs.

👉 If you’re new to DAFs, here’s a quick by-the-book definition: a DAF is “a tax-advantaged charitable giving account that lets you automate contributions, centrally manage your donations, and expand your giving capacity.” Think about it like a 401(k), but for charitable giving.

DAFs can benefit everyone. They’re a tax-smart way to invest in the causes you care about. When you contribute to your DAF, you can write off your contribution for that tax year—and by investing your money, you give it the chance to grow, tax-free, over time. One report found that while donors gave $45 billion to private foundations in 2022, they contributed nearly $86 billion to DAFs.

But too often, money sits in DAFs instead of actually benefiting charities. That same report estimated that there was $229 billion in DAFs in 2022. That money could double the budgets of hundreds of thousands of charities in the United States. Think about all the good those funds could be doing out in the world. 

Here’s an added challenge—today, on October 10, could you deploy 10% of the funds in your DAF?

Farmed animal welfare is a neglected issue when it comes to philanthropy. Choosing to donate to The Humane League, or another organization fighting the cruelty on factory farms, can help tip the scales in favor of animals. 

Thanks for reading! Whatever causes you choose to support, DAFs help every dollar go as far as possible—as long as you actually make the choice to deploy funds. And for that, there’s no time like the present. Like today. DAF Day.

Giving effectively to help animals, people, or the planet? 10/10 from me.

Cheers,

P.S. DAF Day is a new holiday—and so is World Hen Day, which we’re launching for the first time tomorrow. (That’s right: we’re subverting the egg industry’s World Egg Day and making it about the animals instead.) Just something to consider if you’re, you know, looking for a cause to celebrate with a DAF gift today. 😉