Alejandro Crosa (left) and Adam Nash are the founders of Daffy.
Alejandro Crosa (left) and Adam Nash are the founders of Daffy.

An easy way to make regular donations to your favorite non-profits? There’s an app for that.

Silicon Valley has disrupted everything from exercise to movie-watching to food delivery. Add charitable giving to the list.

Adam Nash, a Silicon Valley–based angel investor,  has launched a new company called Daffy that aims to make it cheaper and easier for people to donate money, thereby making it a habit.

“The idea behind Daffy is building a community of people dedicated to giving and making this commitment to put some money aside regularly for those less fortunate than themselves,” said Nash, former CEO of the user-friendly investment platform Wealthfront. “Now this will seem obvious, I think, to the Jewish community in a number of ways. But it’s really a fairly universal value.”

Daffy stands for “donor-advised fund for you.”

A donor-advised fund is a long-established way of philanthropic giving. Unlike the typical “write a check and send it to the food bank” style of giving, people put money into a fund that’s managed by a third party. As with a 401(k), the money is invested and, if the stock market is bullish, it grows.

“So while you’re figuring out which charities you want to give to, that money isn’t sitting idle, it actually is working for you, hopefully growing your impact,” Nash said.

The person who gives the money chooses where it goes. More importantly, they choose when; the money stays in the fund until the donor wishes to distribute it.

What Nash is doing with Daffy is streamlining the giving process by introducing people who don’t have donor-advised funds to the concept, while making it cheaper and simpler than a traditional donor-advised fund by having low minimums and low fees. Daffy users only have to commit to paying at least $25 per month or a one-time contribution of $100 into their funds, although Nash hopes they’ll give more.

“We’re really just trying to make it easy to give,” he said.

Users — Daffy calls them “members” — can donate either by linking their bank account or using credit cards to put money in. They can even use Apple Pay or donate cryptocurrencies or stock. They choose from among nine investment portfolios, with options available for crypto investing or environmentally-sustainable investing, as well as a standard portfolio. Donor-advised funds have traditionally been the province of the more well-to-do, as funds often have high minimums and big fees, Nash said. So he’s keeping Daffy’s fees low; there are two tiers, one at $3 per month and one at $20.

And then when they’re asked to donate at a back-to-school PTA fundraiser, for example, they can open their Daffy app and type in the name of any 501(c)3 and how much they want to donate. The app manages everything else, from the payment to the paperwork. (As long as they have an iPhone, that is. Daffy hasn’t launched yet on Android.)

“You type in the Los Altos Education Foundation, or whichever school foundation, $250, boom, it’s done,” said Nash, who with four children is a veteran of many such occasions. “Don’t have to worry about a tax receipt, don’t have to worry about using the donor-advised fund the right way. It’s all right there.”

Daffy does ask its users to commit to putting money aside regularly in order to get into what Nash called a habit of giving. It’s something he saw his own children learning at Gideon Hausner Jewish Day School in Palo Alto, where kids bring in change for the tzedakah box.

“And then every semester, they vote as a class on what nonprofit to give that money to,” he said. “It’s a wonderful tradition.”

RELATED: Author Lila Corwin Berman grabs third rail — Jewish philanthropy

While Daffy, which launched at the end of September, is new, donor-advised funds are already a huge industry. According to the Stanford Social Innovation Review, a year ago there were more than 500,000 of them, with a total pot of money worth more than $100 billion.

That $100 billion , however, is a sum promised to charities, not necessarily the money actually given to charities — yet.

“The donor-advised fund, at its heart, lets you separate that act of putting money aside from figuring out who to give to,” Nash said. “And of course, from a tax perspective, there are huge advantages to doing so.”

The tax part is important. Putting money into a donor-advised fund is tax deductible, like all charitable giving. That’s true in the year the donation was made. But because people can choose when to distribute the money from their fund, it means donors can take a tax break long before a charity receives the money.

“DAFs are a tax-efficient way to plan and organize your giving, now and over time. Many people in tech suddenly find themselves with the means to give, but without knowing exactly how to make the biggest impact. With a DAF, you can give now while investing your contributions, including cryptocurrency gifts, for future use,” said Debbie Tuttle Berkowitz, the senior director of family philanthropy at the S.F.-based Jewish Community Federation and Endowment Fund.

In the Jewish world, the S.F. Federation is one of the largest local organizations managing donor-advised funds. According to communications director Kerry Philp, in 2020, the Federation disbursed 10,815 grants from more than 1,100 donor-advised funds, handing out $87 million. Those were higher numbers than usual, though, with an 18 percent jump from the previous year because of the community’s response to the pandemic.

The Federation not only handles the investing and paperwork for its donor-advised funds, which require a minimum of $5,000 to set up, it also provides advice on how to give out the money in a way that reflects the donor’s values.

“Rather than feel obligated to give large gifts quickly, we can help you find the organizations doing the work most meaningful to you, and can help you plan your giving over time for the greatest impact,” Berkowitz said.

According to Lila Corwin Berman, author of “The American Jewish Philanthropic Complex: The History of a Multibillion-Dollar Institution,” the whole system of donor-advised funds came about because of a policy push by Jewish tax lawyer Norman Sugarman, who wanted to build charitable organizations for stability — and make giving more attractive, tax-wise.

But there’s been criticism of how donor-advised funds can end up becoming well-stuffed wallets full to the brim even when charities are desperate for dollars.

At a talk at Stanford in October covered by J., Berman told the audience that the system of donor-advised funds and endowments reinforces inequalities in American life.

“I remain really curious about when and how we as a country began to believe that private capital can build a better and more fully provisioned public, and what other models along the way have been considered, attempted and rejected,” she said.

But for Nash, a Bay Area native who went to South Peninsula Hebrew Day School and co-chairs the steering committee of ICON, an organization that aims to link Israeli entrepreneurs to potential funders through high-level networking, Daffy is just a way to make giving back easier: A one-tap donation via an app.  That way, he believes, more people will do it.

“If you think that you are not giving as much as you should,” he advised, “I would say don’t wait until you’re older, or retired, to have more time to focus on giving.”

Maya Mirsky
Maya Mirsky

Maya Mirsky is a J. Staff Writer based in Oakland.