Introducing a new Donor-Advised Fund (DAF)
Betterment Advisor Solutions is excited to announce the addition of Daffy, our first donor-advised fund provider, which allows your clients to make a donation—and an impact—with ease.
Clients can now access a cost-effective, subscription-based DAF, where they can set annual giving goals and distribute donations to 1.5 million charities, schools, and faith-based organizations—all in one place.
Why donor-advised funds can be ideal for high-net-worth clients
With a donor-advised fund, your clients can contribute appreciated assets—like stocks—to a charitable account and receive immediate tax deductions. Contributing to a donor-advised fund can simplify the donation process and give your clients the flexibility to decide when and where to distribute funds to various charities over time. It also enables them to avoid capital gains taxes on the donated assets.
Top benefits of a donor-advised fund with Betterment Advisor Solutions
- Cost advantages: Your clients will pay a flat fee starting at $3/month for self-directed donations, instead of the AUM-based fees incumbents charge that can add up over time. And clients who want to collaborate with their financial advisor can add you to help manage their donations. Compare that to donor-advised funds managed by traditional advisors, like Fidelity or Vanguard, which cost clients $100/month, as of October 2024.
- Delightful client experience: Clients seeking to maximize the tax benefits of a DAF can manage one-time or recurring donations, set up automatic contributions, and view their donation history—all in one place. They can also give you access to manage everything on their behalf for added convenience.
- No processing fees: Unlike other providers, Betterment doesn’t charge processing fees for transfers to the donor-advised fund—or for charitable donations. This means 100% of what your clients give goes directly to the charities they care about.
How to get started with our donor-advised fund provider
Getting started is easy! Clients can navigate to the Transfers tab on their Betterment dashboard. From there, they will scroll down to “Other ways to transfer” and select “Donate to charity.” They’ll receive information on the perks of donating, and at that point, they can choose to donate through Daffy. Here’s how:
- Make a donation to Daffy. Clients will receive an immediate tax deduction, and their funds will be held at Daffy if they have not yet set up their account.
- Create a Daffy account. Clients should use this referral link to set up a Daffy account, which is required to manage their donations. Daffy allows your clients to grow their charitable funds tax-free while they decide which causes to support—all for a flat fee, starting at $3/month.
- Select charities. After creating an account, clients can log into Daffy to make donations to more than a million nonprofits.
Managing your clients’ donor-advised fund
Your clients also have the ability to add you to their Daffy fund. This will allow you to make charitable donations on their behalf, request a change in the fund’s investment portfolio, access tax receipts, and recommend donations for them—all through Daffy’s advisor portal. Learn more about advisor capabilities on Daffy.
Ready to help your clients maximize their charitable impact? Download our user-friendly one-pager to learn more and share with your clients to help support their philanthropic goals. And, check out this blog post to help your clients understand the specific tax benefits of donating shares to a donor-advised fund.
