Posted In:

DAF, Square, COVID-19


#338
DAFinitely Worth It

Published:

May 30, 2020


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Posted In:

DAF, Square, COVID-19

Published:

May 30, 2020


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Every year over $400b is given to charitable causes in the U.S. – around 2% of GDP. There are various ways to give, but the most common are direct donations or increasingly through Donor-Advised Funds (DAFs) – which now account for over $110b of assets but only $30b of donations.

DAFs are best described as a “waiting room” for charitable donations. People who wish to give money to charity irrevocably deposit money (or securities) into a DAF account, where they can continue to invest it (aggressively or conservatively) while deciding how to donate the money far into the future.

Critics of DAFs point to the large gap between the immediate benefit of the tax-deduction while donors maintain “control” of the assets and the disbursement over an extended period of time. Some proposed legislation is trying to maintain transparency around disbursements.

Mark Zuckerberg and Jack Dorsey recently announced the transfer of Facebook and Square stock into DAFs. Dorsey manages his DAF through a google sheet (you can track it here) with transparent donations.

With the tax benefit and the discretion on how the donations get spent those that are opting for DAFs are probably saying it is DAFintely worth it.

Portfolio News


Investing in times of crisis: how to keep calm and finish strong - NYC Fintech Women, in partnership with portfolio company MoneyLion and STASH, invite you to a panel discussion on investing during the pandemic on June 9th 5pm EST. Sign Up

Introducing Decentralized Asset Finance: onboarding the world to DeFi - Congrats to portfolio company Centrifuge in reaching a huge milestone in publicly launching Tin Lake & the Centrifuge Chain to help bridge the gap of real-world assets into the DeFi ecosystem. Read more

The insufficiency of credit data in a non-financial crisis - David Snitkof of portfolio company Ocrolus shares perspectives on our current time, when credit data has gone from highly valuable to clearly insufficient. Read more

DAFinitely Worth It


Twitter CEO Jack Dorsey donating $1b of his equity in Square to COVID-19 relief efforts - The DAF assets have a market value of $1.3b and $85m have been dispersed since April 2, 2020 to a variety of COVID-19 relief causes, according to a public Google document that Dorsey set up to disclose his donations. Read more

‘HalfMyDAF’ movement aims to spur a boost in donor-advised-fund grants - #HalfMyDAF challenge emerges to speed funds into charities in need. The push comes as California lawmakers seek to jump-start efforts to require more transparency for DAFs. Read more

Donor-advised funds look positioned to meet “rainy day” promise - DAFs have grown substantially in philanthropic importance over the last 15 years. Giving is currently up among the organizations interviewed by NPT over the course of March and April. Read more

Industry News


Open banking moving from compliance challenge to commercial opportunity - European financial institutions are spending between €50-100m on open banking initiatives, with spend exceeding €100m for 45% of the 290 financial institutions. Read more

PayPal to launch loans program to support Brazilian SMEs - Dan Schulman, PayPal's President, says that the increase in digital payments could allow PayPal to acquire 15-20m new customers during the pandemic. Read more

Stripe expanding presence in Latin America during 2020 - As one of the world’s most rapidly developing geographies, the opportunity for Stripe to truly improve the payments experience for Latin American merchants is enormous. Read more

Goldman delays digital wealth management push - GS has pushed back this year’s planned launch of a digital wealth management platform and is slowing its hiring of advisers. The platform, the latest step in Goldman’s move into mass-market wealth management, would now go live in 2021. Read more

Borrower, beware: credit-card fraud attempts rise during the coronavirus crisis - Fraudsters are increasingly using pilfered credit-card numbers and phishing attacks to prey on overwhelmed consumers and banks during the coronavirus pandemic. The dollar volume of attempted fraudulent transactions rose 35% in April from a year earlier, FIS said. Read more

Bitcoiners go wild after Goldman revives tulip mania comparison - One by one, Goldman laid out rebuttals against many of the merits frequently cited by crypto evangelists that aim to hold up the superiority of the digital tokens. As a result they forged a lot of new enemies -- in the crypto world. Read more

Designing insurance for the next pandemic - The industry is already planning for the next crisis — and the threat of a second wave means it might be only months away! Read more

China's crypto is all about tracing and power - Beijing will come out of the coronavirus crisis with a big first-mover advantage in its official digital currency. It isn’t a coincidence that China’s project picked up speed last year as Facebook announced Libra, suggesting there’s also a power play at work. Read more

Share issues apps: phoned-in financing - When UK regulators suspended preemption rules so struggling businesses could rapidly issue shares retail shareholders complained about dilution to earnings but then showed little appetite in subscribing to these blockbuster financings through apps like PrimaryBid. Read more

Coronavirus accelerates shift away from cash - The FT digs into the effects that are being felt through the banking system. ATM transaction volumes fell as much as 62% year on year at the start of the UK lockdown and merchants are moving cashless - “I have taken no cash since I opened — and I love it,” said a fish and chip shop owner in Lancashire! Read more

Coronavirus spawns a new generation of Japanese stock pickers - Japan’s 5 leading online brokerages claim 0.5m new account openings in March / April. That is roughly 2x the average for this time of year, these new converts to investment have not been idle. Read more

Select Financings


a55 - Brazil and Mexico based alternative SME lender raised $5m in Series A financing led by Santander InnoVentures. Read more

Belvo - Barcelona and Mexico based open banking API platform raised $10m in a Seed round co-led by Founders Fund and Kaszek. Read more

Benepass - California based employee tax and benefits platform raised $2.4m in Seed funding led by Gradient Ventures. Read more

Coalition - San Francisco based cybersecurity insurance startup raised $90m in Series C funding led by Valor Equity Partners at a pre-money valuation of $890m. Read more

Fundbox - San Francisco based B2B credit network raised $20m in a Series C extension led by MUFG Innovation Partners. Read more

GoBear - Singapore consumer comparison site for financial products raised $17m from Walvis Participaties and Aegon N.V. Read more

LeverEdge - Boston based student loans platform for volume discounts raised $2.5m in Seed funding led by NFX. Read more

Marqeta - California based payment card issuer raised $150m led by Capital Group at a $4.3b pre-money valuation. Read more

Meniga - London based digital banking technology provider for banks raised €8.5m led by Groupe BPCE. Read more

Pie Insurance - Washington, D.C. based workers’ comp insurance for SMEs raised $127m in a Series B extension led by Gallatin Point Capital. Read more

Stackin’ - Los Angeles based marketplace for fintech apps raised $12.6m in Series B funding led by Octopus Ventures. Read more

Starling - U.K. based challenger bank raised £40m in a venture round led by JTC and Merian Global Investors. Read more

Treasury Intelligence Solutions - Germany based platform for managing corporate payments and cash flow raised $20m in a Series D extension led by Aquiline Technology Growth. Read more

Vesta - Oregon based e-commerce payments fraud protection raised $125m in venture funding led by Goldfinch Partners. Read more


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