3 Takeaways From Our DAF Giving Summit Webinar on Maximizing Impact With Impact-First Investing

Donor Advised Fund (DAF) accounts are home to roughly $230 billion in assets earmarked for charitable purposes. Roughly 20% of these assets are granted out each year, and roughly 20% new assets are added each year.  

What if donors and fund administrators had an easy way to put this money to work catalyzing measurable impact before it goes out the door?  

Donors and foundations across the country, including the Silicon Valley Community Foundation, the Chicago Community Trust, and the San Francisco Foundation, are already doing this, getting extra mileage out of their yet-to-be-granted charitable dollars by funding investable, market-based solutions to our toughest social and environmental challenges. 

Social Finance’s Jess Brooks, Vice President of Investor Relations, and Mike Silvestri, Director, Impact Investing, walked through the various impact-first investing tools that make this possible during a recent webinar hosted by DAF Giving Summit, an annual event that brings together thought leaders in the wealth management and charitable giving industries.

Watch the webinar →

1. Impact-first investing is an impactful and increasingly popular approach to deploying DAF assets for good 

The primary purpose of impact-first investing is generating social and/or environmental outcomes. Principal recovery and financial return are the secondary objectives. Common examples of impact-first investing include lending to nonprofits and providing low-cost loans to community development financial institutions that aid underserved communities.  

This approach is becoming more popular among DAF account holders. A survey from Social Finance found that DAF holders are increasingly interested in impact-first investing, with 72% having interest in making impact-first investments through their accounts.

2. Turnkey impact-first investing tools offer quick pathways to impact 

Many DAF holders want to put their charitable dollars to work in ways that achieve real impact, but asset allocators, advisors, and DAF administrators often lack the time or resources to find and vet quality impact-first investment opportunities. 

Turnkey tools like the Social Finance Impact First Fund allow DAF donors to easily put their money to work. The Fund is a direct investment vehicle that helps DAF donors access a variety of curated, vetted funds designed to create measurable social and environmental impact across a number of issue areas, including affordable housing, rural economic development, climate justice, childcare, and early childhood education.

Depending on their DAF provider, donors may be able to make a direct investment in the Fund itself and/or through a recoverable grant to Social Finance, Inc., a 501(c)(3) nonprofit. 

3. Customized portfolios can channel capital toward impact-investments that match donor charitable giving objectives 

Many DAF holders, foundations, and family offices operate with specific impact goals in mind and require bespoke impact-first investing support.  

We recently partnered with The Boston Foundation (TBF), its DAF donors, and staff to develop and implement a strategy to expand financing for BIPOC small businesses, climate justice, equitable housing, and family stability in Greater Boston.

Social Finance helped TBF design, diligence, and deploy capital across four thematic portfolios. In four months, TBF’s donors channeled $6.1 million dollars into local impact-first investments that our diligence confirmed to have strong repayment potential. 

Impact-first investing offers DAF donors and fund administrators the opportunity to maximize their impact, but identifying and vetting quality impact-first investments is difficult work. Social Finance wants to make it easier.  

Want more information about the Social Finance Impact First Fund or our impact investing advisory services? Contact Jess Brooks or Mike Silvestri → 

Photo courtesy of Nina Robinson/Getty Images/Images of Empowerment.