0:00Welcome to How to Money. I'm Joel and today I'm talking about the smarter way to give to charity with Adam Nash. Okay, so technology has made it easier than ever to save and invest [music].
0:19But when it comes to giving our money away, not so much. That's part of why we have a generosity gap in this country, I think. A lot of people want to give more, but the process can feel cumbersome and complicated, especially at tax time. You're like, "Oh man, all these papers to keep track of." And frankly, sometimes a little joyless.
0:38But my guest today is all about changing that perception of philanthropy. What if you could gamify it? What if you could make it easier? Maybe even uh get a little dopamine hit from being generous.
0:48That's kind of cool. Um that's that's something that Adam Nash has thought a lot about. Daffy is my favorite giving platform for a slew of reasons, many of which we're going to dig in today, and it's it's clearly resonating. Daffy now has more than $2 billion in charitable assets, just 5 years after launching.
1:03Adam Nash has a a fascinating history in Silicon Valley. I won't delve into all of it right now. And he is the co-founder and CEO of Daffy. So, Adam, thanks for joining me. It's been a minute.
1:13Uh Joel, thanks for having me. Great to be here.
1:15Uh first question we ask everybody who comes on the show. I don't remember what you said last time you came on. What's your craft beer equivalent? What are you splurging on while you're still doing smart stuff and you've got enough money to also give away to the charities that matter to you?
1:27I actually talk about this sometimes. I actually do think it's important to have these little splurges financially. I you know, I do a lot in personal finance um and teach a class. Um probably my biggest splurge is um you know, once my career got to a certain success point, LinkedIn went public, etc. Um I got this advice from a friend um and an investor, a venture capitalist, who said like you should pick something some small thing that you can splurge on just so that you don't spend too much money on on stupid things.
1:56actually my splurge, is going to sound so boring, but my splurge is I started about 15 years ago, if someone recommends a book to me, I just buy it. I literally just pull out the Amazon app and buy it. I don't worry about how much I'm spending on books type of thing, which is why, by the way, if you come to my house, I have piles of books everywhere. My wife is so patient, but um that's probably my most consistent splurge.
2:19I saw a great quote recently. I couldn't tell you exactly what, but it was something along the lines of the the pursuit of buying all sorts of books, even if you know you can't read them, is this beautiful spiritual quest and and and just having them around. There's something good about it, even if you can't get around to reading all of them.
2:34You know, I love having them around, but also it does give you a little bit more of that, you know, it's so hard, you're so busy with different times and, you know, everything. We have kids and, you know, work and and everything. Um the fact that if I have time or I want to I have time for a new book, um I always have a pot like a selection.
2:52You know, what are you in the mood for?
2:53Is it science-related? Is it business?
2:56Is it, you know, you know, economics, fiction, like whatever it is. So, um anyway, that's my splurge.
3:02All right. I like it. Uh first question I want to ask is you you have a blog. You don't write regularly, but you did write something this past summer. And you wrote about your grandma who passed away, who lived uh to the ripe old age of 100. Um and you wrote about the way she thought about frugality and its influence on you. I'm curious, could you just like give a little peek inside of the window of your relationship with your grandma
3:30and then kind of how she helped teach you about money?
3:34Yeah, that's a a really nice topic.
3:36Yeah, I I feel a little guilty about the blog. Um my blog goes back like 20 years and I go through phases. There's years where I write, you know, every week and then there's years where posts don't come out and like everyone because I'm posting on social media, etc. It it it's easy to to not write. I probably write mostly for Daffy now, but um but no, my grandma I mean, you know, um it really is a generational thing. My grandmother, you know, is that, you know, silent generation, right? You know, born in in
4:041925 and she passed away recently, but um she had a special place um for a number of reasons, but, you know, around money it was kind of funny. Um my grandparents never had a lot of money.
4:16Um you never felt that though, but their generation was just frugal in a different way. It wasn't It didn't have the intensity of a, you know, a modern Reddit board or, you know, like, you know, um how I can get here or how I could retire like any anything detailed like that. It was this combination of like you don't waste anything, right?
4:34Like um you know, newspapers come, you don't waste the rubber bands. Like they went into a a jar, right? Like um you just literally everything. My grandfather's type like if he he if he took something apart and you had the screws, like he kept that bowl of screws and and reused them. So, there was a little bit of that kind of um frugality of of But I I think of it not as frugality as more of like you don't waste things. Like things have value. If they have value, you you don't you don't um waste them.
5:02Yeah, reading your post it felt like there was a a a virtue part piece to that approach to frugality instead of a an optimization kind of approach. And I do think that there is a lot of benefit from viewing frugality that way.
5:17Yeah, I think so. I mean, listen, I I, you know, I'm I'm in Silicon Valley and I'm an active angel investor or versed for venture capital firms.
5:23Um there's definitely a philosophy that says like, "Listen, you spend money to make money in some cases." And by the way, in in venture capital, you know, like most startups don't succeed and so you get very used to this like, "It's okay, you know, the winners will pay for the losers." But I I that doesn't really map to me for what how to live a good life personally, like your own financial life. And so, I really I really love that. Um But yeah, I learned a lot of what I know about personal finance from my grandmother.
5:50I've I've written about this too in the past. You know, I um went to college, um, you know, had odd jobs that paid, you know, I I had my minimum wage jobs and that sort of thing. And so, um, I remember the first time I had this job, um, that actually paid decent money. I think it paid uh a little over 2,200 a month. Most money I'd ever made at the time. It It seemed like a ridiculous amount of money at the time.
6:13Saved up a few thousand dollars and, um, what happened was I went back to fall quarter and bought a new computer cuz have to be that's on point. That was my splurge at the time. And I ended up, you know, by Thanksgiving, I checked my account. I had less than a thousand dollars and I was like, oh my how how could I have blown all this money? Like that's how I felt. I didn't really blow it, but I how could I have spent it all so quickly?
6:38And my grandmother, who had been a teacher, had just retired. And so, she had endless time. And so, she just taught me about, you know, everything from savings accounts and interest rates and, you know, certificates of deposit, mutual funds she was very into. I mean, this is before kind of the internet was a thing. And so, she had like binders, right, of of mutual fund information.
6:59She would get those, you know, like all this information. So, I just found it fascinating. And and fortunately, I was still in school, so I could start taking classes as well. But, I give her a lot of credit for kind of being a guide for that journey of of of me starting to learn and get interested in in money in in personal finance.
7:17That's cool. I feel like the the further we get away from that generation, maybe the the less we can, uh, relate to, sadly, some of what they went through and and some of the lessons they learned about kind of frugality and money money management. So, um, that's really that's really cool. Thank you for sharing that. I want to talk about giving in particular. That's That's what most of this episode's going to be about, right? So, I I I'm curious all all the press gets the headlines are made by mega philanthropists. Right? The
7:46the the multi-billionaires who make large lump sums or maybe they even you know have have the Bill Gates Foundation which gives away an insane amount of money every single year. Um what what's the state of giving in this country and what what's the state of giving in particular for like middle class Americans?
8:07Yeah, you know, it's it's a really interesting thing. I think it's a symptom of where we are as a a culture and where media is. It feels like we're more than 10 15 years into this just incredible fascination with with the ultra-wealthy and and it has it creates this distortion because we're really talking about very few people.
8:27Like that doesn't describe the the common experience and it doesn't describe actually what's going on. So, you know, the last numbers I saw for giving in the US um I think a year ago charitable giving in the US was almost 700 billion dollars. I think it was 692 billion dollars. And um which is huge by the way. That's like 2%of the economy if you measured it that way. It's actually bigger than a lot of other sectors that we spend a lot of time talking about. Um and um
8:56but I think people have this impression that all that money is given by the the billionaires the the ultra-wealthy and actually um the two big myths is one um most of that money is not from foundations or corporations or institutions. Most of that giving comes from individuals. Right? People like you and me. And and the second myth you know, out there is that like somehow giving is something that only the the wealthy do or people only do when they're retired. And the truth is it's like 50 to 60 million American
9:25households give to charity every year. Right? You know, and and we see this at DAF right? Like our our you know, we we certainly have a a whole breadth of accounts. Right? There's you know, people of all different ways and walks of life all different means, um, build giving in.
9:40But, you know, our average customer at Daffy puts aside a few hundred dollars, few thousand dollars for charity, gives to a half a dozen charities a year. It's very normal. People give to their kids' schools. They get They belong to a church or a synagogue. They give to a religious institution. They They see a cause that they believe in, they give to it. Um, but giving is fairly universal.
10:01I mean, you have to admit, like it it's hard to think of a culture, a religion, a society across the world that doesn't have giving as part of its lessons, of its moral structure, right? Like, it's not all for you. Right? Some Some It's just not all for you, right? Like, and if you have the means, you know, to to put a little aside for those less fortunate than yourself, um, I mean, most people think that's the right thing to do. And so, when you look at the numbers in the US, they actually reflect that truth. It's just that's not what you read about.
10:30Right? That article isn't I guess not I guess it's not that interesting. I think it's very interesting [laughter]. Um, Yeah, here's the normal Joe Schmo who gave $50 to the local nonprofit that he cares about that that's, you know, for rescue animals or something. That doesn't make headlines. What a billion-dollar donation.
10:47you know, someone giving a billion dollars to a university or someone giving away billions to a bunch of causes. And by the way, that's all great. I I'm I'm not judging giving. I actually, you know, if you ask me, you know, for these big gifts that are are coming from the ultra-wealthy, should they be smaller or larger? I'm I'm definitely in the larger camp. So, I'm I'm fine with that. But, um, I do think there's a problem when people think that they don't realize that that's not the typical state of giving, right? Like, most charities around the
11:15US are not that big. They're not the big names you hear about, but they're not that big. They're filled with good people who are trying to do something good. They saw a gap, right? A social good that needed to be filled. They thought, "Hey, if we get together, spend our time on it, we can do something good for our area, for our community." And, um and they have a real trouble finding people who care.
11:36And so um I I Daffy we just spend our time trying to figure out how we can bring those people together with those organizations.
11:43Talk about like the emotional connection to giving. Um I saw something just just like a couple days ago about being people being asked to give at a grocery store and how they're actually frustrated by it. And if they if they get asked too often to give at a retail location they go to, they might not go back there. Uh because and I'm not it's funny I'm with them. I don't really like that either. I cuz I've planned my giving in advance. I kind of know where I want to give. I'm I'm very thoughtful about it. And I don't want to give
12:12thoughtlessly in the moment. But talk to where do you how do you help people make the connections or or how between the emotion that they feel about a cause they've heard about and and how to think about giving money away towards that cause?
12:26Well, I think you're getting to the heart of it. You know, it's funny I I I've written a bit about this when Daffy was founded. But um there really is a catch-22 going on. I think that most people um don't love being solicited. Right? They They you know, like especially when you're doing something else.
12:43Right? Like um at the same time everyone is so busy with work, family, you know, like there there's a hundred things that at a time. You know, when I when I before we wrote a line of code, right? We built anything at Daffy, I spent time talking to dozens of people across the country about how they think about giving.
13:05And I learned a lot of things from those conversations. But one of the things I learned is that most people actually believe in giving. Right? They They They want to give. They They They think that some of the money can be used for for good outside of themselves. This is great. No one agrees on the number by the way. But But But something almost everyone agrees on something versus nothing. Right? Like you know.
13:27Um but when you ask someone what that number is, whatever their personal goal is, right? Do they want to give a certain percentage of their income, a certain dollar amount, whatever it is.
13:36Almost to a T, everyone I talked to, when I said, "Well, how much did you give to charity last year?"
13:43That's when you got the the pregnant pause. That's where you got this gap, this this reflection of like, "Actually, I didn't. Um, it wasn't as much as I I think I should have, that I would tell other people." And it's because they got too busy. And so I think that the sector, like most of these organizations, the reason they push, right? And you know, solicit, you know, these campaigns to raise money, is because the statistics say that actually most people give because they
14:12were asked. Um, and I don't think that a guilty reaction so often? It's like, I meant to, now I'm being asked, so all right, I'll do it now and then I won't feel so bad.
14:21I'm sure that's a part of it. Um, I think some of it actually is information. Most people actually haven't spent the time to even know what organizations are available, right? Like what what's out there. And so I think when you hear something that resonates with you, but for a lot of people, it depends on who asks, right? Like, you know, a friend is raising money, a you know, I joined an organization, volunteered somewhere. I mean, a lot of it is friends, family, colleagues, right? You know, the school that all the kids attend in the neighborhood, that sort of thing.
14:48Um, but I mean, that's a lot of what we think we're we're trying to do with DAFs. I mean, one of the things that gets me excited about the growth of donor advised funds and just people putting money aside for charity is that it's proactive, right? Like, if you once you put money aside for charity, it can't be used for anything else.
15:06And then people can actually think more about, well, who does it go to, right?
15:10They can be intentional. What causes speak to them, what organizations really matter for them, because they know they have the money to give. And so what I'm hoping is happening in the industry, what I see happening with giving in the US is that I think a lot of people actually would prefer it to be more proactive, more intentional.
15:29And I think rich people solve this problem a long time ago with you know foundations, with you know funds and and that sort of thing. And I think the donor advised fund is just opening that up to everyone else to say no no you should have a an account, a little bank that you put aside money for charity.
15:43And that way when you're inspired to give or you want to support an organization, you don't have to worry about the money piece. You can worry about the piece the piece that we actually love, which is getting connected to people and organizations and causes that we think are important.
15:56It's it's kind of like saving for retirement and you mean to, you plan to put open the Roth IRA and put some money in or something like that. But unless you dollar cost average and you get it set on autopilot, it's not going to happen for a whole lot of people because if you have to actively manually go in there and put the money in every month, it just doesn't get done. One of the one of the criticisms of donor advised funds has been that you set aside money for future giving. And so you're not actually giving the money to the organization
16:24that needs the money yet.
16:27And as someone who it's a as someone who is kind of an optimizer and an and likes to invest, I see that pull in myself at times where I'm like it's fun to watch the number go up and to build a stash of money to give away for the future. But I also want to give in the here and now to organizations that matter to me. Talk to me about how that criticism of donor advised funds and how you respond to it.
16:52Yeah, well it comes up a lot. Although you know this is another one of those things where it's like the numbers don't bear it out. Right? Like it turns out that and and this is pretty obvious. I mean, it turns out once you put money aside for something, the money gets spent. Like it it goes out. Like the donation rate at DAF is is immensely higher than the typical foundation or even the typical donor advised fund. But I think in general, when people put, you know, put money aside for charity, actually we think
17:21that might be the hardest step. It's just to take the money out of your own wallet and put it aside for others. Once it's there, it feels so good to give. Right? When you find a cause, when something happen, I mean, maybe a crisis happens. There's a fire somewhere.
17:36Um there's a flood. Maybe it's a local thing. The school is raising money for good cause. The ability to have that money available to give when you want to give it. Um we see it in the data, right? Like we we actually publish data at DAF E. We see that as people join DAF E and they're with us for, you know, quarters and years, etc.
17:54Their giving just grows over time. And so, I actually love your analogy. Um retirement is a good one. I I use it myself. Um the real advantage of donor advised funds is it makes it easy to put money aside for charity when it's convenient for you.
18:11That way when people are asking you for money, normally when people ask you to give, you're kind of solving two problems at once. Like, how much can I afford to give? And then, is this the right group to give it to, right? Who do I give it to?
18:25I mean, this is basic, you know, psychology. Like, we learn this in product design. Giving people two hard problems at once is not just twice as hard for people. Like, it just gums up the works. Like, you just get stuck. And the donor advised fund just separates those two problems brilliantly. And so, I like your analogy. I mean, I we all know this for retirement.
18:46It's just facts. People don't I'm not going to say that they didn't. They don't save for retirement reliably unless you automate it.
18:55Right? Unless it comes out of the paycheck.
18:57We've seen that with the auto enrollment for 401Ks. Like, people are putting more money aside in retirement accounts if when they get the job, they they are auto enrolled in the program instead of having to make that make that positive choice. Talk to me about the choice of where you give money away.
19:12Do you have any advice or thoughts for people on in a I don't know how many charities you can give to through the Daffy site? It has I mean six figures? I mean like are we talking about 100,000 plus charities or we talking about 20,000 charities? There's got to be a ton. How do you then decide where is an effective place to give the money that I want that I want to give to go to good causes?
19:36Yeah, well I think that's um I think that's a really hard problem and I don't want to scare you or anything, but um there's there's over 1.7 million charities in the US alone.
19:46I could not have guessed that.
19:48Yeah, and um the great thing about a donor advised fund like Daffy is is you can give to any of them. Right? If it's a legal charity you you can make a recommendation, have money go out. Um the problem of who you give money to, I mean this has been debated and discussed for generations, right? For centuries.
20:05Like what what what causes are worthy?
20:06It's a very personal decision. Um I I really do think that causes and organizations speak to people at a very personal level. It has to do with their own experience and um how they think about the world and where they want to do good and have impact. Um but I do think it's very broken. I mean one of the things I love about Daffy as a community is we did structure it as a community. And what I mean by that is, you know, when you give on Daffy for example, um you have this option. I know it sounds obvious, but you can actually
20:34leave a public note. I mean what internet site doesn't have like comments and notes and that sort of thing, but yeah. And by the way, they're not always great on all these other sites. Um but when it comes to giving, I will tell you this is amazing content. It's it's it's really a wonderful thing. You know, if someone gives to a charity, they'll leave a note in saying, "Hey, I I give to this charity every year on the anniversary of my father's passing. They supported him for 10 years late in life.
20:59Um it's a wonderful group." Like they they they leave messages like this.
21:04And so So you are looking at charities on Daffy, you can see those notes from other people, right? To help give you that confidence. Because I think there's a lot of good information. The internet is great. Um you can now look up almost any charity in the US. You can find its website. You can look up its status. There's third-party sites that'll give you ratings about how they spend their money, all these different things.
21:27I don't know though. You know, giving is very human.
21:30Um I think all that data is good. I don't know that that gets people over the line to reach into their pocket to give. I I think what's really exciting about giving is when you connect with other people, right? You know, a lot of these organizations like people volunteer at food banks and they get to know the other people who volunteer at the food bank. They They meet the people who who benefit from the services at the food bank. And those are real people. I mean, I think there's a lot of humanity around giving. And so I think that when
22:00people come to me with that kind of problem, um the way I look at it is Daffy exists to help people be more generous more often. That's our our mission. And so I always encourage them saying like take the first step. Put the money aside for charity. Right? And don't force it.
22:15Right? Like, you know, do some research, talk to people, find organizations that speak to you. Um and then think about the most important part. Don't think about it as a one-time gift.
22:28Right? You know, like most organizations need ongoing support, right? They pay people every year. They're feeding people every day, not just every year.
22:37And so um you know, if you talk to most charitable organizations, what they would love to have is people who care they would rather get a little bit every year than a one-time donation that then disappears and they have to make up for with a sales campaign in in future years. Um and the great thing about donor advised funds is it makes it so easy to do that, right? Like you find something you care about. You find an institution. Very easy to say that, hey, I'm going to give money to them every year. And as long as you keep the donor advised fund stocked right in the good
23:06years, um you can support organizations. I mean, there are organizations now that I've supported for decades um and probably will support for decades more. It feels good. It feels like you're a part of something. It is really meaningful.
23:19Yeah. All right, I got more I want to get to with you and I want to talk about the the role of AI. How It's impacting everything. It's impacting giving, too. We'll get to some questions on that right after this.
23:36All right, we're back [music] still talking with Adam Nash of Daffy talking about giving giving effectively, which man and making it easy because that is one of the biggest hurdles. People want to give and it seems hard and a donor advised fund, especially through Daffy, really simplifies that. But you you recently wrote a blog. You write on Daffy's site more than your own blog, Adam, but you wrote about the impact of AI, how it's going to transform how we give money away. I'm curious to think to
24:05to hear a little bit more about what sort of impact do you think it's going to have? Is it going to benefit people who want to be more generous? What's what's the impact of AI on giving right now?
24:16Yeah, no, it's it's a great question. I appreciate that. I I I wrote that post just recently just a few weeks ago. Um obviously everyone's talking about AI now um and playing with the products and tools and people have a lot of feelings about it, you know, good, bad, and ugly.
24:31Um I am a technology optimist. I spent most of my career thinking through and building products kind of on the edge of what technology can do. Um it's actually one of the reasons I love technology is because it keeps getting more powerful, right? Computers get faster, we get more memory, networks get faster, and that means that problems that we couldn't solve 10 or 20 years ago, we can solve now. And so, I love that. I mean, I couldn't have built Daffee 20 years ago, but we can build it now.
25:00Um I see AI through that lens. I just see this amazing set of capabilities. I mean, so many I can't even tell you how hard problems were 10 or 20 years ago just to communicate. Commu-Commu- communicating with humans, um let alone, you know, transcribing text or giving you advice. I mean, I think most of us have known the difference, right? Like searching around the web versus getting an answer from an AI app. Like it it feels different. It feels better and and it's more useful.
25:30Um which is why I think when people Sometimes it's wrong. Sometimes it leads you astray, you know, you got to be careful.
25:35I know. Um although I I have a I will I will say just in AI's defense, like turns out some of those pages people were searching for on the internet were also wrong. Some of those That's true.
25:45Not all Reddit comments are correct. So, there there we go. But, um but no I I agree with you. No, it's different. So, um but when I got asked the question like how would AI affect giving, what what really hit me to your earlier question about this over focus on billionaires, a lot of people are focused on the wealth that's being created by AI. I mean, like some of these companies are are worth a trillion dollars now, right?
26:08Like um you have employee millionaires are being minted. I mean, I'm in Silicon Valley. Um you can already feel and see the wealth being created around because there's not one of these companies, not two.
26:19There are thousands of them. Like the half dozen names that people Every field you can imagine venture capitalists are funding new companies to kind of use AI to make it better. It could be legal, it could be accounting, it could be engineering, like whatever literally in every area people are Entertainment. Yeah.
26:37It's this powerful new tool. And so people are saying, "Hey, what can we do with this tool?" Um when I look at giving, though, I look at more from a personal finance lens. And and so what I'm seeing um is that more and more people are turning to AI tools with personal finance questions.
26:53Very personal questions. Not just like how to balance a portfolio to look at their spending. I mean, OpenAI put out numbers a while ago that suggested that over 200 million people are using ChatGPT with personal finance like questions. I mean, that's a huge number. I mean, I I I I love personal finance apps. I've loved them for decades. I mean, you're you're talking to someone who in the'90s was just glowing about, you know, how they used Quicken, uh you know, and spreadsheets and everything to do. And so, um
27:22and I actually understand it because it feels private, right? Money's a little private for people. It feels authoritative. And and by the way, not everyone can afford a high-end wealth manager advisor. The minimums for those for most of those are million dollars or more. And so, when I think about giving that way, um I think what people are missing is that AI is not just about asking questions. It can actually do things for you.
27:50I mean, people are, you know, already engineers are using AI not not to give them advice on their code. The AI is writing code.
27:59Right? It is doing their And so, you see this and you're seeing a a whole new crop of services where the AI does things for you, right? Which is very different than previous generations of technology. And so, what I'm thinking about is a world where when you ask AI what to do, you're you're asking questions like, "Hey, you know, um this stock has run up.
28:18Should I sell some of it? You should diversify. It's going to be giving advice about taxes. Maybe you should donate some of that stock to save money. Um maybe it's as simple as as saying like,"Hey, how much should I give to my kids'school last year? What should I give this year? What other charities should I give to?"I think all these questions are already happening.
28:37Mhm. Kind of like,"Hey, I love this charity. I've donated regularly. What else is in that sphere that would make sense for me as a giver?"
28:44So, that's the the questioning that's happening now. But I think that over the next 3 to 5 years, you're just going to see more and more people not just asking the question, but having AI do it for them. And so, what does it mean to be in a world where actually more and more giving isn't happening because a person is doing it, but they're delegating it to AI to do it for them.
29:06And so, actually we were excited about that. So, Daffy I think is the, you know, might be the first donor-advised fund um to actually have an MCP server to actually have an integration. I mean, you can literally go now, you know, to to whatever your favorite AI tool is, you know, ChatGPT, Claude, whatever you love using, um you can add your Daffy to it, and you can actually ask it questions about your giving. I actually plugged my own Daffy into it and was playing with it. It was amazingly insightful. Like,"Summarize what I've given to over the last 3 years."And and, you know, organizations, or there's
29:36others suggest, um you know, if I, you know, if I'm going to be giving more over the next 10 years, um how should I approach that? There There's so many questions you can ask um once you actually have the data about what you've done.
29:51Right? And um so, yeah. So, we we actually did the feature. So, that's that's available now for all of our customers on Daffy. You don't need to be a programmer. You don't need to understand API keys or anything like that. You literally can just add Daffy um to your favorite AI tool and start asking questions. And actually, you can actually make donations with it as well, which is incredibly powerful. So, um we're trying to build for that future, but I think that if I was talking to the whole industry, I'd just say, "Hey, listen, you know, with this last
30:19generation of fintech, you know, giving kind of got left out, right? A lot of modern fintech platforms still don't have the ability to donate directly from the platform. Um now I'm seeing this new generation of technology and, you know, with my Daffy hat on, I'm saying, "Hey, let's let's not make the same mistake this time. Like, let's make sure that all these AI tools from day one can give." Right? Because we're talking about people using them.
30:45And we want to incentivize what we want to see more of. And generosity is is definitely something we want to see more of. Last time Last time you came on, we talked about the benefits of giving money away, the tax benefits. And just from a practical standpoint, uh the standard deduction is quite high at this point. And most people take the standard deduction. So, would you say How do you help people think about the tax benefits of giving if
31:13the giving they're doing is it matters. It's meaningful to them, and the money they're giving matters to the organization, but it doesn't necessarily do anything for their tax status?
31:24Well, I'm I'm glad you asked that. You know, in some cases, people get really excited talking about taxes. Not not everyone, but some people do. I I'm one of the maybe the minority of people gets excited talking about taxes and that sort of thing. But, um but you know, somebody get excited about taxes, and it's easy to lose focus on on the idea that that taxes are an incentive to give, but it's not why people give.
31:46Right? People give regardless of taxes, right? People etc. And you know, the the tax incentive there, you know, in theory, is because there's a lot of social goods out there. And if you decide that there's one you want to put money towards, like we consider that a valid way to use dollars for the public good. So, that that's why it's out there. Um but people do care about taxes etc.
32:07So, when people talk about the standard deduction, I I usually have two answers.
32:10You know, one is um you know, there are things that you can do that that make more sense, right? That can also save money on taxes beyond the charitable deduction. Like you and I have talked about the benefits of donating stock, right? One of the bene- If you If you have a great investment in a stock, it could be crypto, it could be an ETF, and it could be a boring index fund, which I love. I love boring index funds.
32:33But, you know what? If you hold a boring index fund for 5, 10, 20, 30 years, it accrues gains. Right? Just just Vanguard Total Market over the last 10 years has a lot of gains. If you sell Vanguard Total Market, you're going to pay taxes on those gains. But if you donate those shares to charity, you'll never pay the capital gains tax. Right? So, there's multiple ways to save on taxes. Donor-advised funds, the money's invested tax-free.
32:59All the growth in the donor-advised fund pays no taxes. And so, there are multiple ways to save on taxes that I encourage people. The other thing I'd actually say with the standard deduction, and this came up a lot with the recent OBBA bill. Did I get the right number of B's? I think so. B B B beautiful, yep. Uh-huh.
33:19Yeah, three B's. Okay.
33:20Um, but you know, one of the things that became very clear with the bill is that there's an amazing incentive now to do what's called bunching, which you can do with the donor-advised fund. Which is, listen: if you give a small amount to charity every year, and you take the standard deduction, you won't get the charitable deduction for that. But in let's say you have a good year.
33:39You got a big bonus one year, stock market's up, something good happened, right? Like your your income's up. If you have the wherewithal to put aside multiple years of giving at once, you can clear that standard deduction, right? And get the full benefit of that.
33:56And then you have the money to give every year for the next few years. You don't have to reach into your pocket every year. And so, we're seeing a big trend now where more and more people are thinking that way. I mean, most most Americans, their income isn't level every year. Right? We We have good years and and not so good years. And so, the ability to put money aside for charity in the good years in a donor-advised fund, so you have money to give in the not-so-good years, um it turns out that's not just good
34:25financial advice. It turns out that's actually also the tax code is really rewarding it now.
34:30The The thing that I think, when I first found out about DAF that, that kind of blew my mind and and got me interested was and then I learned, oh wow, there's a lot more benefits to having a donor advised fund than just this but it was the low cost. And the Vanguard and Fidelity, which are companies we talk about all the time on the podcast, they're fantastic; they've been, they've done a great service to everyday investors reducing fees. We know the more, like all the data you look at,
34:59fees are a drag on returns.
35:01And so, if somebody is out there, they want to open up a donor advised fund, can you talk about the difference in fees between even some of these big low-cost brokerage companies and DAF, and how that impacts your ability for your dollars to go further when giving?
35:20Yeah, I'm happy to, and I do care a lot about the fees that are involved there because, frankly that, those fees are our money that could go to charity. [laughter] So, you know, so fundamentally, I do care about that.
35:33And you're right, actually; most people are very surprised to find out that at institutions you know, Fidelity, Vanguard etc., where they have very low fees on other products, that their fees on the donor advised fund are actually so high. I mean, Vanguard, I love Vanguard; I have actually made the pilgrimage in the past to Malvern, Pennsylvania, and got to tour Vanguard.
35:53I love Vanguard, and Vanguard has done so much for millions of people to give them low-cost, high-quality financial products, but wow, they have a $25,000 minimum for the account just to open it, and then once you open it, anything up to $500,000 they're charging 0.6%. I don't even know if there's another Vanguard product that that's that high.
36:18I think you're right but I think that this just reflects the fact of who they're optimizing for right they they're they make their money as a percentage of fees and AUM fee and so they're looking for the larger accounts, right? And and and you know, their financial advisors are the same.
36:35We built Daffy differently, right? So Daffy is the only large scale, you know, we're now the 10th largest DAF in the US. But we're the only DAF that charges doesn't charge asset based fees, right?
36:47For management. We we charge a flat monthly fee. Actually, we're free to get started. If you have if you donate all the money and keep your account under $100, it's free. But for most people they pay $3 a month. Um we have a family plan at $5 a month.
37:01Um but the reason we do that is partially because we want the incentives aligned. Most a lot of great I shouldn't say most a lot of great nonprofits structure themselves that way with a membership fee and so we we decided to structure Daffy the same way. Um but I I do think it creates a problem for the industry. Um not only is it more fees coming out of your account, the incentives are a little off, right?
37:24You know, if if if you have a $100,000 at a firm like Fidelity and you decide to give $10,000 to a charity, their revenue just dropped.
37:35You know, just dropped 10%, right? You know, so I much prefer a system where, you know, Daffy is built for people who plan on giving throughout their life, right? It does take money to fund Daffy, right? So like we we we we can't do it for free.
37:52But you know, having a membership fee that's tiered based on the features and the capabilities and how much people are giving felt a much better way to run a donor advised fund than just charging a percentage of assets like a financial advisor does. We're we're not financial advisors.
38:08That's not what we're doing. We we think of ourselves as providing a wonderful service to the community to make it as easy as possible to put aside money for charity and we try to do everything we can. You want to put aside cash?
38:20Whatever, you want to use Apple Pay?
38:22We'll do it. Stock, ETFs, crypto, what private stock, what what whatever you want to put aside for charity, we want to help you do it. And um and so the fact that we can do it low cost is just a testament to the fact that technology has progressed, right? Um like I said, I don't think we could have done this 20 years ago.
38:39But all that great technology that makes it, you know, free to trade stocks or, you know, um you know, easy to get a high-paying bank account, etc. Like we just use that technology to to make it easy to give.
38:50Yeah, I love it. All right, we've got a few more questions get to with you, Adam. I want to talk about too, just kind of what's happening in the economy right now, how that impacts giving, get to a few top-of-mind questions with you right after this. All right, we're back. Got [music] a few more questions for Adam Nash from Daffy.
39:14And again, like donor-advised funds, I we have a lot of information up on the website at howtomoney.com. Uh I didn't feel like this needed to be an in-depth explainer of every facet of a donor-advised fund, Adam. Um but there is all that information up on the website that people can check out because the for people who are used to giving directly to charities, they might say, "What is this middle middleman getting in the way of my direct relationship with a charity?" But I will say when it I mentioned the fees being the first thing that attracted me to donor-advised funds, your low fees and
39:42the ability to kind of invest um money for the future that I wanted to give away. But then one of the other things was the reduced paperwork at tax time and having everything go through this one central location. Uh there was a nonprofit I wanted to give extra money to recently and I realized, "Oh, I Well, I've got more money because the money's been growing." And then I can give it in one fell swoop. I think I hit the the the donate button on 10/1 and I saw the check was sent out on 10/2 and I was like, "Beautiful." Like it it it just
40:12seamless, easy, makes giving uh Uh, kind of fun, too. Can Can you maybe just speak really quickly to the fun factor?
40:19Uh, I think that's one of the reasons Robinhood has been successful is there is they they have created the features that entice modern investors. And I do think of Daffy as having some similarities to Robinhood but on the giving front where it's not just painless, whereas like going to the Vanguard website is a little painful. Um, it's not just painless but it's also kind of uh, kind of fun.
40:45Like even the there's the the little ape. Is it the Daffy ape?
40:49Uh, and and on the sliding scale and he like smiles or frowns based on how much money you're done or no, I guess he doesn't frown. He doesn't get to the point of frowning but maybe just a straight face. Yeah, talk to me about all that stuff. He's a happy gorilla, yeah.
41:01He's a happy gorilla. He's very generous gorilla.
41:04Um, but no, yeah, actually you're hitting on I really love that you're saying this because that's actually what we were trying to do. I mean, going back to day one, we just celebrated our fifth birthday um, at Daffy but, you know, on day one the idea was, "Hey, um, all these fintech apps have done this fantastic job getting more people to save, invest, spend better, etc. We can do the same thing for giving." So, yeah, Robinhood can give you confetti for buying into an IPO. We can give you confetti for being generous and putting money aside. And, or or, like Apple
41:33Health like: if it helps people exercise and stay healthier by tracking their progress, we can give you a giving goal and then celebrate when you hit your giving goal for the year and then ask you, maybe, maybe make it bigger next year you know, nudge you for more.
41:46Um, so yeah, um, I think that we do a lot of those things. All these engagement things that people talk about online, they can they are based in behavioral research. So, the reason that these apps do these things is because they drive engagement.
42:00But for us, we're just trying to drive giving. And And so, we want to make you feel good. And And And there's an old-fashioned reason for it, too. When I did some of that research talking to dozens of people across the country, it really struck me that for most of us, there's someone in our life that actually taught us to be generous.
42:19Could be a parent, relative, a teacher, a priest, rabbi, like someone made an impression usually that that that said like giving's important. It's part of a healthy life, part of a good life. I mean, a lot of parents talk about how they teach their children how to do this.
42:35And so yeah, we we can't be that that person, but but Daffy can make give you that feeling sometimes that you did a good thing. That yeah, you put money aside. So we do work on that. I think there's more that we can always do, but we give people badges and rewards for hitting different milestones, the first time they donate stock or you know, all these different things.
42:53Um but you're right, actually part of the power of Daffy um has nothing to do with taxes and and and and money. It actually has to do with the fact that um having one place for your giving is actually really useful. I mean, how many of us at the end of the year, I mean, I used to joke about this, but at a certain age, there's a certain age of person where they actually have a folder on their desk.
43:13And then every time they give, they print out the receipt or they save it in a folder. So at tax time, they have their receipts.
43:19Um there's younger age themselves in the face because there's way too many to wade through.
43:24Well, I know, but actually at a younger age, everyone's just searching Gmail looking for email receipts for these things, you know, cuz and so like Daffy solves that problem and more. You have all your receipts in one place. Um you know, like uh obviously a lot of my friends except for our parents, that sort of thing. What did I give to the school last year? Such an obvious question, so hard to answer for some reason.
43:46Um setting up recurring donations, so you don't have to worry about it, right?
43:50Um and because we use modern tech, I mean, having an app means that you know, if if you're at the school function, if you're in an event, you're being asked to give, you can actually pull out your phone, tap tap tap, give the money in. I know that sounds obvious, but it turns out you know, when we launched Daffy, there were there was no other national donor advised fund that even had an app to make these donations. And so so actually we we do everything we can to make it easy, but but you're right.
44:14One of the big advantages of the DAF turns out to be it's good to have one place for your giving. It's not just a technology problem. It it's actually about how we handle money. It turns out that having separating parts of your budget, parts of your financial life is helpful.
44:30Having a separate retirement account is helpful. Having a separate savings account is helpful. Having a separate account for your giving turns out to be very helpful. And a lot of people tell us this.
44:41Yeah, what would what would you say to someone who they hear they've been listening to this conversation, they love the idea of generosity, but they they say Adam, in this economy, really? Give Give my like I inflation and the high cost of of food and they wouldn't be wrong. I mean when you look at the statistics Moody's released not too long ago about the increased cost people are facing from gasoline and and largely just from the spring and the start of the war in Iran.
45:10Costs have have risen for Americans across the board significantly. So how would you respond to someone who's like, why are we talking about giving? I'm just I'm just like trying to make ends meet. Well, yeah, and I'm I'm very sympathetic to it. I I spoke to it earlier. The truth is one of the aspects of the modern economy, and this is not recent. This is this data goes back decades.
45:33But um people's income is really variable now.
45:37Right? It's just not a consistent thing every year. I I know some people are fortunate to have jobs where it's just like clockwork etc., but most people do not. I mean I I was at LinkedIn for over four years. I saw huge amounts of career data. No one's career and job trajectory looks like that anymore. We have good years and not so good years. But you know, if someone said that to me, the first thing I would say to them is not that. The first thing I would say to them is saying, "Hey, that's right.
46:02And actually that means that actually there's a lot of people who need more help right now. Right? Remember, giving is two sides. Like giving is not just about reaching into your own pocket, it's about recognizing that there are people less fortunate than yourself.
46:16And there are people who really need help. Right? And so usually when you have these stresses and strains um in the economy, you know, there's a balance, right? Like and people respond to the needs they see in their community. I mean, we saw this by the way, DAF was founded in the pandemic. Right? A lot of people looked around and all of a sudden realized like,"Hey, there's a lot of people who need help."And and and that motivated some people to give.
46:39But I would never push people um to give painfully or if if if it's not working like if if if people all have their own priorities, people have their own lives. I I wouldn't get in the middle of that. I would say that the great reason to have a donor-advised fund is because it makes it easy to put money aside for charity when things are good.
47:02Right? Like I think what you're speaking to also is that people who have been in financial pain they know what it's like. Whether it was growing up or whether it was 2 years ago, they tend to have a particular bent towards giving money away because they know what it's like to to not have what they needed.
47:21This is all the statistics say the same thing that once again, we we talked earlier about how there's a belief that somehow most giving is done by wealthy people. Actually, the statistics say that actually very ordinary people living, you know, like most of us, that actually people with less means actually percentage-wise are more generous because they know both sides of the equation.
47:42I'll just tell you though that um for a lot of people, right? Like DAF has been around only 5 years, but you know, in years where the stock market hasn't been up, where there's a lot of job stress or or like you said like where costs are up, etc., People still don't like saying no to the organizations they support. I mean, if you give money to your church every year, it doesn't feel great to say not this year. Costs are higher.
48:10That's not what people want to do.
48:13And so, like the benefit is if you put money aside in a donor-advised fund last year or the year before, maybe you don't have as much money to give this year. But because you put money into the donor-advised fund last year, the year before, you can still give to those organizations you care about.
48:30And so, however you want to think about it, I I I really think getting in the habit of putting money aside for charity when you can, Mhm.
48:37so that you have it in the times where you it's not so easy. That's actually That's actually the benefit. Right? It It lets you give consistently.
48:46Something that didn't exist last time we spoke was and you I don't remember when you launched it, a couple years ago, Daffy for Work. Can you talk a little bit about that cuz it's This is the ability for employers then to match what you're giving? Is that right?
49:02That's exactly right. It doesn't have to be matching. Actually, it started with the simplest idea. We had a member who had a business and he said,"I wanted I want all my employees I want to build giving into my culture, right?
49:13Um can I just pay for Daffy for everyone?"
49:16Right? And And actually, he was very generous. He wanted to give his employees a certain amount of money every year to give to the charity of their choice. And so, that's how Daffy for Work was born.
49:25As we said,"Oh, um this is a great idea, right? A lot of companies want to build giving into their culture. A lot of companies care about their communities that they operate in, right? Like in most companies actually do support nonprofits in their area. What a great way to support giving."It's kind of like a 401k for charity, right? That was the basic idea. And so, um and now we have some amazingly large companies on the platform. I mean, um OpenAI, we were talking about AI earlier. OpenAI um was one of our lighthouse customers, one of
49:54the first ones to use Daffy for work.
49:55But for the last 3 years, if you joined Open AI, they told you that they have retirement accounts and they match a certain amount you put aside for retirement, and they have charitable accounts with Daffy, and they match up to $500 that you put aside for charity. Um, and so actually we think it's a great program. We actually have made this very easy to do. You know, the truth is, um, it's easy to talk about big companies doing it and we love any company doing it. But we actually made it self-service because there's a lot of small businesses where this actually makes a lot of sense. A lot of small business owners support
50:25charities in their their towns in their local areas. Um, and so we made it very easy to just kind of, you can put in the corporate card or the bank account or whatever and and yeah, you can just pay for Daffy for your employees. Um, you can do matching.
50:40Right? So you can match up to a certain amount per year. Um, we even for, um, for larger companies, we actually support matching with stock or private stock. Right? So, um, so we we just try to make it as easy as possible for people to put money aside for charity and we love the fact that companies have that same priority for their employees.
50:59So, all right, last question. What's the next step in 2 years from now? How will donor advised funds, how will Daffy, how will giving have changed? What what do we have to look forward to?
51:10Look, the the biggest thing that's going on with donor advised funds right now is that most people haven't heard of them. Mhm. So I think you're just going to continue to see this expansion. Um, you know, 10, 15 years ago, I mean, donor advised funds have been around for decades. I think the earliest one dates back to like the 1930s. Like they've been around for a long time.
51:27You know, it's it's making me think it's kind of like HSAs. HSAs are finally getting all this press about how tax advantage they are, how you can invest in them, how you can really use them as an account to save and invest for your future. And it's but it was very 10 years ago, nobody knew. Nobody knew about HSAs and the power they could have.
51:47Look, 401(k)s and IRAs didn't even exist until the late'70s, etc. But now this arcane line in the tax code, everyone knows what a 401(k) is, IRA. Like 529 plans came out in the late '90s. People now know what they are. I think we have a history in this country of kind of these tax-advantaged accounts, but it takes time for people to hear about them. And like I said earlier, donor-advised funds, the existing industry was very focused on the wealthy.
52:13And so I think just most people hadn't heard of it. I hadn't heard of it. I I heard about the way a lot of people hear about it, which is that um there was a point that you know, LinkedIn was going public. There were all these advisors and accountants around. And if you get an accountant or an advisor, financial advisor, they'll tell you about a donor-advised fund. But most people don't have an advisor or an accountant.
52:32be honest, because of the cost, it didn't make a whole lot of sense for the average person who's giving away $500, $1,000, $3,000 a year even to sign up for a donor-advised fund. But now that the model has changed, it makes sense for almost everybody.
52:49That's right. So I think the biggest thing that's going to happen over the next couple years is just this mass adoption. You can see it in the numbers. It It's It's one of the fastest-growing types of accounts. So I I think that's the big thing.
53:00And I think what goes with that, and what I'm excited about, is just making it easier for all the ways that people give, right? You know, so you know, for example, um one of the reasons that um we make a big deal about donating stock is that more and more people are working for companies that actually pay them with stock.
53:19Right? And and so we want to make it easy for them to give that. Crypto is the same way. I mean, we even support private stock now. Um but we're learning. We We get our best feature ideas from our members.
53:29Like every year with a team, like we hear these things, we're like,"That's a great idea. Why hasn't anyone done that?"Um and um so a lot of it right now I think is just building into that growth and supporting um all the people who want to give.
53:43And and wonderful things like um one of our most recent features that we were so excited about launching was just matching campaigns. We had a lot of people who said,"Hey, um rather than just give money to charity, I'd love to help them raise some money for charity. I'll match every donation made."I mean, how long has GoFundMe been around? Like forever.
54:03You know, but no donor advised funds existed.
54:05launch those campaigns.
54:07That's right. And so, you know, so we, we, I think what you're just going to see a lot now is just a lot of innovation, a lot of the support, a lot of new tech. But the big story I think is going to be is that right now, when you talk about donor advised funds, you know, you're in a group of 10 people maybe one or two people have heard of it.
54:25I think within the next three to five years it's going to be a situation where almost everyone has heard of a donor advised fund.
54:30I think you're right. Your lips to God's ears, Adam. I hope so cuz I think and and that we've been talking about them for many many many years now on How to Money and love what you guys are doing.
54:40It's making generosity more available and people can use the the tips that and the the ways giving money that used to be kind of reserved for people who had a lot more money. So, love what you guys are doing, democratizing the space. Adam Nash, CEO of DAFfy, thank you for joining me today.
54:59No, thanks for having me.
